Contagious Exporting and Foreign Ownership: Evidence from Firms in Shanghai using a Bayesian Spatial Bivariate Probit Model

Badi Baltagi, Peter Egger and Michaela Kesina
Additional contact information
Michaela Kesina: ETH Zurich

No 211, Center for Policy Research Working Papers from Center for Policy Research, Maxwell School, Syracuse University

Abstract: Whether a firm is able to attract foreign capital and whether it may participate at the export market depends on whether the fixed costs associated with doing so are at least covered by the incremental operating profits. This paper provides evidence that success for some firms in attracting foreign investors and in exporting appears to reduce the associated fixed costs with exporting or foreign ownership in other firms. Using data on 8,959 firms located in Shanghai, we find that contagion and spillovers in exporting and in foreign ownership decisions within an area of 10 miles in the city of Shanghai amplify fixed-cost reductions for both exporting as well as foreign ownership of neighboring firms. Contagion among exporters and among foreign-owned firms, respectively, amplify shocks to the profitability of these activities to a large extent. These findings are established through the estimation of a spatial bivariate probit model.

Keywords: Firm-Level Exports; Firm-Level Foreign Ownership; Contagion; Spatial Econometrics; Chinese Firms (search for similar items in EconPapers)
JEL-codes: C11 C31 C35 F14 F23 L22 R10 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2018-04
New Economics Papers: this item is included in nep-cfn, nep-cna, nep-geo, nep-sbm and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://surface.syr.edu/cpr/243/ (application/pdf)

Related works:
Journal Article: Contagious exporting and foreign ownership: Evidence from firms in Shanghai using a Bayesian spatial bivariate probit model (2019)
Working Paper: Contagious Exporting and Foreign Ownership: Evidence from Firms in Shanghai Using a Bayesian Spatial Bivariate Probit Model (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:max:cprwps:211

Access Statistics for this paper

More papers in Center for Policy Research Working Papers from Center for Policy Research, Maxwell School, Syracuse University 426 Eggers Hall, Syracuse, New York USA 13244-1020. Contact information at EDIRC.
Bibliographic data for series maintained by Katrina Fiacchi ().