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Distribution margins and distribution-oriented FDI: Evidence from China

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  • Tian, Wei
  • Wu, Xinhong

Abstract

This paper constructs a new measure of distribution margins that covers more countries than that in the World Input–Output Database. Based on this measure, we develop a set of stylized facts and examine the effect of distribution margins on exporters' distribution-oriented foreign direct investment decision using customs data and foreign direct investment decision data from China. We find that higher distribution margins in destination countries drive exporters to conduct distribution-oriented foreign direct investment. Compared with specialized export intermediaries, manufacturers have a greater incentive to invest in distribution sectors abroad when faced with higher distribution margins.

Suggested Citation

  • Tian, Wei & Wu, Xinhong, 2024. "Distribution margins and distribution-oriented FDI: Evidence from China," Emerging Markets Review, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:ememar:v:62:y:2024:i:c:s1566014124000645
    DOI: 10.1016/j.ememar.2024.101169
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    More about this item

    Keywords

    Distribution margins; Distribution-oriented FDI; Input-output table; Exporter integration;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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