Multinational Exposure and the Quality of New Chinese Exports

We exploit information on the geographic, product and trader characteristics of China's 1997-2009 exports to examine how the evolving city-industry presence of multinational firms influenced the quality, frequency and survival of new export transactions by private Chinese firms. Our results show that own-industry multinational firm contact was associated with more frequent, higher-valued, and longer-lasting new trade transactions. These effects appear to arise from beneficial multinational spillovers, rather than selection effects due to increased multinational competition, as increases in own-industry or other multinational presence were also associated with an increase in the number of trade transactions introduced by private Chinese firms.