2015年-世界发展银行全球_Chinese_Firms_Entry_to_Export_Markets___The_Role_of_Foreign_Export_Spillovers_30页_207kb

Summary of "Chinese Firms' Entry to Export Markets: The Role of Foreign Export Spillovers"

Core Content

This paper investigates the role of foreign export spillovers in facilitating the entry of Chinese domestic firms into new export markets. It analyzes how the export activities of foreign firms in China influence the creation of new export linkages by domestic firms, using panel data from Chinese customs covering the period 1997–2007. The study focuses on the extensive margin of trade, which refers to the number of new export transactions rather than the volume of existing ones.

Main Findings

• Positive Spillover Effect: Chinese domestic firms are more likely to start exporting new products to new markets when neighboring foreign firms are also exporting to those markets.
• Specificity of Spillovers: These spillovers are product and country specific, meaning they are more pronounced for certain products and destinations.
• Robustness: The results are robust to fixed effects and instrumental variable (IV) specifications, which control for supply and demand shocks.
• Magnitude: The marginal impact of foreign export spillovers is five times larger than the effect of a 10% increase in demand for the product in the destination country.
• Limitations: Spillovers are primarily associated with ordinary trade activities, not export-platform (processing trade) activities.
• Policy Implications: Even though China has a significant cost advantage, there is room for policy interventions to enhance export performance through the diffusion of best practices among domestic and foreign firms.

Key Mechanisms

• Information Spillovers: Foreign firms provide market-specific information (e.g., consumer preferences, distribution networks) that helps domestic firms reduce fixed export costs.
• Cost Sharing: Domestic firms may benefit from shared export costs (e.g., international freight, marketing, logistics) with foreign firms.
• Mutualized Actions: Export activities are often mutually beneficial, especially in the context of ordinary trade rather than processing trade.

Empirical Approach

• Data: The study uses HS4-level product data, with province, product, and destination country as key dimensions.
• Sample: The dataset includes over 11.5 million observations (province/product/country/year), with approximately 1.1 million domestic starts (new export linkages).
• Model: A gravity-type equation is used to estimate the probability of a domestic firm starting an export linkage. The model includes:
  • Fixed effects at the province-product-destination country level.
  • Year fixed effects to control for aggregate shocks.
  • Controls such as:
    • Destination country import value and GDP per capita.
    • Provincial and national comparative advantage and export intensity.
    • Lagged values of domestic and foreign exports to control for dynamics.
• Spillover Proxies:
  • Presence of foreign firms in the same product-country pair.
  • Value of foreign exports to the same product-country pair.
• Endogeneity: The study carefully addresses endogeneity by using instrumental variables (e.g., export promotion zones and product-country demand shocks).

Spillover Types

The paper decomposes foreign export spillovers into four types:

1. Product and country specific (foreign exports of product $k$ to country $j$).
2. Country specific (foreign exports of other products to country $j$).
3. Product specific (foreign exports of product $k$ to other countries).
4. General spillovers (foreign exports of other products to other countries).

Descriptive Statistics

• Destinations: The U.S. is the main destination for new trade linkages, but it accounts for only 1.8% of all export starts. Other key destinations include Hong Kong, South Korea, and Japan.
• Provinces: Guangdong (8.5%) and Zhejiang (7.5%) are the most dynamic provinces in terms of export starts.
• Sectors: The sector "Nuclear reactors, machinery etc." accounts for the largest share of new export linkages (10.5%), followed by "Electrical machinery etc." (6.6%) and "Articles of iron and steel" (4.4%).

Policy Relevance

• The study highlights the importance of foreign firms in promoting export activities in China, even when their direct contribution to GDP is limited.
• It suggests that policy-makers should consider the role of foreign firms in generating export externalities and design targeted export promotion strategies based on the specific nature of these spillovers.
• The findings imply that foreign firms can act as export catalysts, especially in ordinary trade, and that their influence is not limited to processing trade.

Conclusion

The paper contributes to the literature on export spillovers and the role of foreign firms in export development. It demonstrates that foreign export activities can have a significant positive impact on domestic firms' entry into new markets, particularly when spillovers are product and country specific. The results also suggest that while foreign firms do not directly contribute to GDP growth in China, they can still play an indirect role in enhancing the export capabilities of domestic firms through the diffusion of knowledge and shared costs.

References

• The paper draws on previous studies such as Amiti and Freund (2010), Xu and Lu (2009), Aitken et al. (1997), Koenig (2009), and Krautheim (2012).
• Data sources include Chinese Customs, BACI, and World Development Indicators.

Methodological Notes

• The paper avoids firm-level data due to its unavailability, instead using province-product-destination country data, which is considered sufficiently detailed for micro-level analysis.
• The conditional logit model is employed, with clustering at the province level to correct for standard error bias.
• The spillover effect is found to decay spatially, indicating that proximity plays a key role in the transmission of these effects.