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Entry on difficult export markets by Chinese domestic firms: the role of foreign export spillovers

Florian Mayneris () and Sandra Poncet ()

No 2011063, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In this study, we explore how the intensity of foreign export spillovers in China varies depending on the difficulty of entry on export markets. We rely on different proxies to define what a "difficult" country is and we find that the presence of surrounding foreign exporting firms helps domestic ones to start exporting, especially when destination countries are difficult. While on average exposure to foreign exporters is associated with a 10% increase of the probability that domestic firms from the same province start exporting the year after, the figure is around 50% higher when the targeted destination country is identified as difficult. Our results are consistent with the idea that exposure to foreign exporters helps to reduce the fixed cost of creating new trade linkages. Our finding hence suggests that the increasing presence of foreign exporting firms in China might contribute to the diversification of Chinese domestic firms' exports towards more difficult and previously inaccessible destinations.

Keywords: foreign export spillovers; difficult markets; China (search for similar items in EconPapers)
JEL-codes: F1 R12 L25 (search for similar items in EconPapers)
Date: 2011-12-22
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Working Paper: Entry on difficult export markets by Chinese domestic firms: the role of foreign export spillovers (2011) Downloads
Working Paper: Entry on difficult export markets by Chinese domestic firms: the role of foreign export spillovers (2011) Downloads
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