Exports and New Products in China–A Generalised Propensity Score Approach with Firm-to-Firm Spillovers

TY - JOUR

T1 - Exports and New Products in China–A Generalised Propensity Score Approach with Firm-to-Firm Spillovers

AU - Gong, Yundan

AU - Hanley, Aoife

N1 - Funding Information: We would like to thank delegates of the 2020 ISGEP workshop in Dublin, and participants at the IfW Research seminar for helpful comments. Additionally, administrative support from the Kiel Centre of Globalization. Our special thanks go to Michaela Rank for her unstinting efforts in formatting the final manuscript. We are happy to share do files to facilitate replication. To our knowledge, access to the data, Annual Reports of Industrial Enterprise Statistics, is subject to the application procedures and private agreement with the China National Bureau of Statistics. For researchers interested in using this data, we are happy to assist. Publisher Copyright: © 2021 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.

PY - 2021

Y1 - 2021

N2 - Underpinning China’s technological advancement are the twin-engines of exports and innovation. To better understand China’s meteoric economic transformation, we explore the extent to which new products are triggered by exports (direct effects) and by exposure to other exporters (indirect effects). Our methodology (generalised propensity score model) tackles two sources of selectivity bias–at the level of the firm and neighbourhood. Given that production is highly specialised and localised, it would be unusual if firms failed to learn from exposure to local exporters.Our findings reveal an overwhelmingly positive direct effect of exports on new product introductions. Also, a more modest spillover effect. Interestingly, firms with a reduced need to innovate (processing exporters) can also appropriate export spillovers. Our findings have implications for other developing countries seeking to maximise exporting in economic clusters, promoting innovation and ultimately growth.

AB - Underpinning China’s technological advancement are the twin-engines of exports and innovation. To better understand China’s meteoric economic transformation, we explore the extent to which new products are triggered by exports (direct effects) and by exposure to other exporters (indirect effects). Our methodology (generalised propensity score model) tackles two sources of selectivity bias–at the level of the firm and neighbourhood. Given that production is highly specialised and localised, it would be unusual if firms failed to learn from exposure to local exporters.Our findings reveal an overwhelmingly positive direct effect of exports on new product introductions. Also, a more modest spillover effect. Interestingly, firms with a reduced need to innovate (processing exporters) can also appropriate export spillovers. Our findings have implications for other developing countries seeking to maximise exporting in economic clusters, promoting innovation and ultimately growth.

KW - export and innovation

KW - export spillovers

KW - Generalised Propensity Score

UR - http://www.scopus.com/inward/record.url?scp=85112501664&partnerID=8YFLogxK

U2 - 10.1080/00220388.2021.1956470

DO - 10.1080/00220388.2021.1956470

M3 - Article

AN - SCOPUS:85112501664

SN - 0022-0388

VL - 57

SP - 2136

EP - 2155

JO - JOURNAL OF DEVELOPMENT STUDIES

JF - JOURNAL OF DEVELOPMENT STUDIES

IS - 12

ER -