2018
DOI: 10.1111/roie.12374
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Importing exporters and exporting importers: A study of the decision of Chinese firms to engage in international trade

Abstract: This paper examines the complex and interdependent relationship between importing and exporting for a panel of Chinese manufacturing firms. We estimate the decision to import and export simultaneously within a dynamic random‐effects bivariate probit framework addressing the endogenous initial conditions problem. Results show that decisions to export and import are simultaneously determined and that sunk‐entry costs play a significant role in a firm's decision to enter international markets. Costs are larger fo… Show more

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Cited by 18 publications
(6 citation statements)
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“…Many studies exist on large EMs such as China (e.g. Elliott et al, 2019), where even a no-exporting strategy may be viable because the large volume available in the domestic market may be sufficient to make local firms cost competitive. Firms from smaller EMs may not be cost-competitive if they shun exports, however, because of the constraints posed by the limited market size on achieving a competitive cost structure (Cuervo-Cazurra et al, 2015).…”
Section: Research Implicationsmentioning
confidence: 99%
See 1 more Smart Citation
“…Many studies exist on large EMs such as China (e.g. Elliott et al, 2019), where even a no-exporting strategy may be viable because the large volume available in the domestic market may be sufficient to make local firms cost competitive. Firms from smaller EMs may not be cost-competitive if they shun exports, however, because of the constraints posed by the limited market size on achieving a competitive cost structure (Cuervo-Cazurra et al, 2015).…”
Section: Research Implicationsmentioning
confidence: 99%
“…Exporting is an important and popular strategic option for many emerging market (EM) firms, primarily because it is relatively low-risk and less resource-intensive (e.g. versus FDI), but also because it allows them to leverage some of the advantages of their familiar homecountry environment, such as low factor costs (Elliott et al, 2019;Nuruzzaman et al, 2019). Exports from low-to middle-income countries averaged 25% of their GDP over 1990-2017(World Development Indicators, 2018.…”
Section: Introductionmentioning
confidence: 99%
“…First, due to the fact that it is less risky compared to foreign direct investment and requires fewer resources. Second, it allows companies to possess some advantages of their own countries, such as less production expenses and not being obliged to transfer technology (Elango and Pangarkar, 2020; Elliott et al , 2019; Nuruzzaman et al , 2019). Altogether, export is so important in competitiveness that Kargar (2020) regards competitiveness at the national level as equivalent to the notion of competitive advantage in the exported products.…”
Section: Literature Reviewmentioning
confidence: 99%
“…For instance, as stated in the literature, the disparity between nations' resource endowments makes foreign trade possible [ 26 ]. When countries trade with each other, both exporting and importing countries are benefited from it [ 27 ]. In addition, the international market also helps to understand the business.…”
Section: Conceptual Framework and Hypothesis Developmentmentioning
confidence: 99%