Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/54914
Authors: 
Defever, Fabrice
Heid, Benedikt
Larch, Mario
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Trade Policy 3672
Abstract: 
In this paper, we provide evidence that expanding firms tend to serve new markets which are geographically close and culturally related to their prior export destinations. We quantify the impact of this spatial pattern using a Chinese firm-level data set. To ensure an exogenous set of potential new destinations (25 EU countries, US and Canada) and an exogenous timing of entry, we focus on firms that benefited from the abrupt end of the textile quota restrictions in 2005. Controlling for firm-product and destination specific effects and accounting for possible multiple new export destinations we show that the probability to export to a country increases by 15 to 38 percent for each prior export destination with a geographical or cultural link with this country.
Subjects: 
export destination choice
spatial correlation
firm-level customs data
MFA/ATC quota removal
JEL: 
F12
F13
C25
Document Type: 
Working Paper

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