Export spillovers with Chinese characteristics

Abstract: This paper investigates the impact of information spillovers on the export entry decision of Chinese manufacturers between 2000 and 2006 by using a combination of firm and transaction level data that allows to track the occurrence of individual export starts and captures the extent of local export agglomeration at a detailed geographical level. We examine if the presence of neighboring exporters involved in similar or different product and destination markets gives rise to knowledge transfers that facilitate a firm’s export entry and carefully consider how differences across starters, neighbors, geographical proximity, trade regimes and private networks influence the transmission of information between firms. Export starts are measured at the product level and related to a disaggregated set of spillover proxies via a linear probability model with fixed effects that accounts for a large set of unobserved firm, region, destination and product characteristics. Our results confirm the presence of export spillovers in China and show that they increase in spillover specificity, vary across different starters and neighbors, are subject to spatial decay, limited to ordinary traders and stronger within private networks. On the one hand, this corroborates the notion that information spillovers act as a catalyzing force for the extensive margin of trade, on the other it emphasizes that the transmission process relies on a conducive unity of its subparts and can be restricted by developmental features common to transition economies.