Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/269339 
Year of Publication: 
2012
Series/Report no.: 
FERDI Working Paper No. P58
Publisher: 
Fondation pour les études et recherches sur le développement international (FERDI), Clermont-Ferrand
Abstract: 
We propose the first evaluation using micro-level data of the expected growth gains from the consistency of activities with local comparative advantage. Using firm level data from Chinese customs over 2000-2006, we investigate the relationship between the export performance of firms and how their products relate to local comparative advantage. Our key indicator measures the density of the links between a product and the local product space. It hence combines information on the intrinsic relatedness of a good with that on the local pattern of specialization. Our results indicate that exports grow faster for goods that have denser links with those currently produced in the firm's locality. The density of links between products thus seems to yield export-enhancing spillovers. We however also show that this positive effect of product relatedness on export performance is mainly limited to ordinary trade activities and domestic firms. It is also stronger for more productive firms, suggesting that spillover diffusion may be hindered by insufficient absorptive capacity.
Subjects: 
product space
density
spillovers
export performance
China
JEL: 
J10
J14
O14
Document Type: 
Working Paper

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