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Abstract
Firms have increasingly conducted different stages of production in different countries. In particular, they may set up operations in low-cost countries (those operations are referred to as foreign affiliates in those countries) either as platforms for export or serving the growing markets there. What is the exporting behavior of foreign affiliates? In this paper, using data from China, we find that among foreign affiliates exporters are less productive than non-exporters. We then offer a theoretical explanation by incorporating into the standard firm heterogeneity model the possibility that firms could have different stages of production in different countries. © 2010 Elsevier B.V.
Keywords
Exporting behavior, Firm heterogeneity, Foreign affiliates
Source Title
Journal of International Economics
Publisher
Series/Report No.
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Date
2010-07
DOI
10.1016/j.jinteco.2010.03.002
Type
Article