Spillover Effect of FDI on Food Exports: Based on Firm-Level Analysis in China

This paper examines the spillover effect of foreign direct investment (FDI) on Chinese domestic food exports under firm heterogeneity. By using a rich firm-level panel data of China’s food firms, the empirical analyses rely on the first-order difference generalized method of moments (GMM) for industry-level analysis, and Heckman’s two-stage method for firm-level analysis. The results show that the horizontal FDI led to a positive spillover effect on domestic food industry exports, varying across food subindustries. The paper also finds that a large part of the promotion effect is driven through extensive margin (the probability to export) instead of intensive margin (the quantities of exports) in firm-level analysis. The heterogeneous export spillovers across food firms are further considered to depend on their nature characteristics, like productivity, size, and ownership. Moreover, the heterogeneities of FDI origins and business purpose are confirmed to influence export spillovers. The estimation results are quite robust for different types of regression specifications and substitutions of variable measurement. These findings provide suggestions for decision-makers to carefully assess the impact of FDI and make policy for the sustainable development of domestic food exports.

The role of firm location and agglomeration economies on export propensity: the case of Portuguese SMEs

PurposeThe present study seeks to assess whether the firm's location and agglomeration economies affect the firm's export propensity.Design/methodology/approachThis work is based on a sample of 20,234 Portuguese manufacturing small and medium enterprises (SMEs) and resort to the estimation of a probit model.FindingsEmpirical results show that the location and agglomeration economies have an important role in determining the firm's export propensity. In particular, the study concludes that SMEs located in coastal areas or close to the border are more likely to export. Furthermore, the study also concludes that specialization economies are an important driver of small and medium-sized firms' export propensity while export spillovers are particularly relevant for micro firms. However, urbanization, measured through firms density in NUTS3 region, negatively affects firms' export propensity, which may be due to high congestion costs in the regions with a high firms density.Originality/valueThis study focus on the determinants of the decision to export or the export propensity, particularly the external factors such as the firm's location and agglomeration economies. This is a relatively neglected topic in the literature that has focused on the determinants of export intensity.

A meta-analysis of export spillovers from FDI: advanced vs emerging markets

Purpose This paper analyzes the available literature on export spillovers from foreign direct investment (FDI) and their effects on domestic firms’ export activities. The purpose of this paper is to advance our knowledge of whether export spillovers from FDI exist, and if so if they differ according to the institutional context of the targeted markets (developed vs emerging markets). Design/methodology/approach Drawing from the pioneering work of Aitken et al. (1997), the authors develop a meta-analysis using a selection of 73 studies for the period 1997–2018, including a wide range of developed and emerging markets. Findings The meta-analysis confirms a high probability of finding positive effects when studying the different types of spillovers. The authors also show that the type of export spillover depends on the institutional context. Spillovers drive a complementary effect which generates more direct commercial links between domestic firms and foreign multinationals for advanced economies, whereas for emerging markets the nature of the spillover generates a competition/imitation effect that pressures domestic firms to be better inserted into foreign markets. In emerging markets, local governments play a fundamental role in accompanying the local industry, not only with investments in infrastructure and training of human capital but also in the configuration of an institutional environment that favors this type of indirect linkages. In developed countries, two business strategies are particularly important as catalytic axes of competitive upgrading at the international level: cooperation agreements between domestic and foreign firms and integration. These processes of concentration are necessary to compete globally, and therefore, governments should promote this type of strategies. Originality/value The study offers an original classification of the different types of spillovers based on the different channels through which MNE help local firms to improve their export performance and shows which specific spillover is associated with the different level of country development. These results have important implications in terms of theory development and managerial and policy implications.