Is Export Spillover Localized in China

Abstract

The hypothesis of localized export spillover has been widely supported by the previous studies. Based on Chinese firm-level data of more than 47,000 firms from 2000 to 2006, this paper investigates whether export spillover is localized in China. Drawing on the idea of revealed comparative advantage, six export spillover indicators are constructed to capture both the within- and between- provinces, cities as well as industries spillover effects. The multinomial logit model estimation results show that there is no sign of localized spillover effects despite the fact that domestic firms gain from export spillovers due to geographic and industrial agglomeration effects. This is especially true for those new entrants to export markets. The finding indicates that there may be export congestions resulting from over-agglomeration of local exporters due to the rapid export expansion in China. Show more