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The effects of outward FDI and export on firm productivity in emerging markets: Evidence from matching approach

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  • Zhou, Chao

Abstract

This study disentangles the effects of outward foreign direct investment (OFDI) and export on the productivity of Chinese manufacturing firms by using the propensity score matching approach with multiple treatments. Results show that just OFDI has a significant positive impact on firm productivity, but that the productivity effect of just export is insignificant. A complementarity exists between OFDI and export in improving firm productivity. Further, the effects of OFDI and export on firm productivity are different in high-tech and low-tech firms.

Suggested Citation

  • Zhou, Chao, 2020. "The effects of outward FDI and export on firm productivity in emerging markets: Evidence from matching approach," Economics Letters, Elsevier, vol. 195(C).
    • Handle: RePEc:eee:ecolet:v:195:y:2020:i:c:s0165176520302858
    DOI: 10.1016/j.econlet.2020.109462
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    References listed on IDEAS

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    4. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
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    6. Branstetter, Lee, 2006. "Is foreign direct investment a channel of knowledge spillovers? Evidence from Japan's FDI in the United States," Journal of International Economics, Elsevier, vol. 68(2), pages 325-344, March.
    7. Mahmut Yasar, 2013. "Imported Capital Input, Absorptive Capacity, And Firm Performance: Evidence From Firm-Level Data," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 88-100, January.
    8. Dai, Xiaoyong & Sun, Zao & Liu, Hang, 2018. "Disentangling the effects of endogenous export and innovation on the performance of Chinese manufacturing firms," China Economic Review, Elsevier, vol. 50(C), pages 42-58.
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    Cited by:

    1. Zhou, Chao & Liao, Jinglin, 2024. "Home country digital finance development and post-entry internationalization speed of emerging market SMEs: Empirical evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    2. Kacou, Kacou Yves Thierry & Kassouri, Yacouba & Evrard, Talnan Hongwopena & Altuntaş, Mehmet, 2022. "Trade openness, export structure, and labor productivity in developing countries: Evidence from panel VAR approach," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 194-205.

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    More about this item

    Keywords

    Outward FDI; Export; Productivity; Propensity score matching; Multiple treatments; China;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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