External knowledge environments and new export market expansion of domestic enterprises

Abstract

Since China joined the World Trade Organization (WTO), export trade has developed rapidly. From the perspective of export entities, domestic enterprises' export is particularly important for regional economic growth and the improvement of China's economic strength. Establishing inter- regional linkages and utilizing external resources can effectively promote the overseas market expansion of domestic enterprises. Based on the import and export data of Chinese customs database from 2001 to 2011, the spillover effect of external knowledge environments on the development of new export market of domestic enterprises of prefecture-level cities was examined by a conditional logistic regression model. This study distinguished three external knowledge environments that affect the overseas market expansion of domestic companies. Domestic companies can: Obtain external knowledge from foreign invested companies in the same region; form cross- regional contacts with companies in neighboring areas and obtain external knowledge; and acquire external knowledge by importing from other countries. By comparing the effects of the three external knowledge environments on the development of new export markets by domestic enterprises at the prefecture-level city scale, this study found that: 1) All three external knowledge environments have positive effects on domestic enterprises in their effort to explore new export markets. Local foreign invested enterprises have the largest spillover effects on exports, followed by the spillover effect of local enterprises' imports, and the effect of export enterprises in neighboring cities is the smallest. 2) In the central, western, and northeastern parts of China, the spillover effect of enterprises in neighboring cities is the largest and the spillover effects of all three external knowledge environments are significantly stronger than those in the eastern regions. 3) The spillover of exports from local foreign invested enterprises and enterprises in neighboring cities is stronger on high-tech products than on low-tech products.