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Exports, Ownership and Firm Productivity: Evidence from China
Author(s) -
Sun Xiaonan,
Hong Junjie
Publication year - 2011
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.2011.01373.x
Subject(s) - endogeneity , productivity , foreign ownership , china , panel data , linkage (software) , economics , product (mathematics) , business , production (economics) , product market , international trade , international economics , monetary economics , foreign direct investment , market economy , incentive , microeconomics , macroeconomics , biochemistry , chemistry , geometry , political science , gene , law , econometrics , mathematics
This paper examines the linkage between exports, ownership and firm productivity. Based on a panel data set that covers over 70,000 Chinese firms from 2001 to 2005, the estimation results provide strong evidence that exports play an important role in enhancing firm productivity. Foreign ownership improves firm performance, but foreign‐owned exporters benefit less from exporting activities compared with domestic exporters. These results are robust to a variety of methods used and consideration of endogeneity issue. We also find that the productivity gain from exporting is greater for new entrants into the international market, and the benefit declines when firms become more experienced. Firms that involve more in exports are more likely to develop new product, suggesting that export‐market participation promotes innovation.