Agglomeration and Firm Export

Abstract

Using Chinese manufacturing data between 1998 and 2007, this paper investigates the impact of agglomeration on firmi¯s export behavior. It is found that the agglomeration of manufacturing industries in China over this period increases firmi¯s export probability as well as its export volume, and the impact is larger for more efficient firms. However, the impact on firmi¯s export volume depends on the degree of agglomeration. When the degree of agglomeration is low, an increase in agglomeration would expand firmi¯s export volume but the impact will be diminishing and even turns negative if the degree of agglomeration is already very high.