Do Chinese exporters still need learning spillovers from foreign MNEs?

Abstract

The study investigates learning spillovers from local firms as well as MNEs in China, and their indirect effects on other firms' exporting, paying particular attention to inter- and intra-industry spillovers. We develop a synthetic model based on the treatment of spillovers in economics, geography and international business, testing four different spillover effects, measured by export propensity and intensity of local Chinese firms associated with four types of export agglomeration. We find significant, positive spillovers effects. Surprisingly, spillovers transmitted from locally-owned exporters to local firms turn out to be stronger than those from foreign-owned exporters to local firms. Unsurprisingly, spillovers transmitted within the same industry are stronger than with different industries. The evidence suggests that after 30 years of openness to international trade and export-oriented development, China's indigenous firms have started to make a significant contribution to the export performance of other local firms. This finding is different from findings from previous empirical analysis, which reveals that maybe there's a diminishing teaching effects from foreign MNEs to local firms.