Research On The Effect Of Industrial Agglomeration On Export Behavior Of China’s Manufacturing Firms

Since China’s reform and opening up, Chinese economy has experienced "a miraculous growth", especially the development of Chinese foreign trade (both in amount and growth rate). At the same time, the industrial agglomeration phenomenon of China’s manufacturing is also becoming more and more prominent. Along with more and more export firms, the phenomenon of industrial agglomeration also becomes much more prominent. This paper attempts to provide an answer to the mystery of China’s manufacturing’s rapid export growth from the perspective of economic agglomeration. Essentially, because industrial agglomeration is a kind of external economy of scale, industrial agglomeration of export firms can effectively reduce the transaction costs and production costs in agglomeration area, and thus this could help the export firms overcome the sunk cost barriers, improve the probability of going into foreign market, and increase the shares of export.In order to study the effect of geographic agglomeration of manufacturing industry on the export behavior in detail, this paper makes three contributions:Firstly, use the micro level data to overcome "synthetic errors" when using macro data; Secondly, adopt LP half parameters estimation method to overcome simultaneity bias and selectivity bias of productivity estimation; Thirdly, use EG index to control the influence of the scale of the enterprise when measuring industrial agglomeration.This paper uses Probit model and Tobit model of0.6million firm pooled panel data2000-2007year, the findings show that:geographic agglomeration of manufacturing industry has a significantly positive impact on export tendency and export intensity, and its marginal effect on export tendency and export intensity is also significantly positive. Further, the positive effects of industrial agglomeration on export tendency and export intensity are slightly weaker than TFP on export behaviors. The factors such as total factor productivity, firm size, human resource, sunk costs and foreign property nature of manufacturing firms all have a significantly positive impact on export behavior, but the impact of state-owned property nature on manufacturing export behavior is significantly negative. The influence of firms’ age on export tendency is negative, but the influence on export intensity is positive. Furthermore, the above factors on heterogeneous firms’ export behavior have regional differences and industry differences.