Multinational exposure, export variety and price: Evidence from Chinese electronics exporters

Chih-Hai Yang and Meng-Wen Tsou

Journal of the Japanese and International Economies, 2015, vol. 38, issue C, 93-110

Abstract: Using a matched firm-transaction dataset on the electronics industry in China, we provide one of the first attempts to examine whether foreign direct investment (FDI) has direct impacts on the export prospects of domestic firms, in terms of export variety and unit price. Using measures of multinational presence constructed at region and industry levels, our results reveal little evidence of multinational spillovers arising from an increase in the export variety of domestic firms. The growing presence of multinational firms has a strongly negative association with the export unit value of domestic firms, suggesting that exposure to multinational firms may intensify the competition in the product market and force local firms to offer lower-value products in the international markets. This adverse influence is mainly driven by processing trade as opposed to ordinary trade, with private firms being less affected by export spillovers than state-owned enterprises. We also find that the productivity of firms can mitigate the negative effect of the exposure to multinational firms on the unit value of exports.

Keywords: Export spillovers; Export variety; Export quality; Unit values; FDI (search for similar items in EconPapers)
JEL-codes: F1 F14 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:38:y:2015:i:c:p:93-110

DOI: 10.1016/j.jjie.2015.05.008

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