Firm Location and the Determinants of Exporting in Developing Countries
Using a cross-section of more than 40,000 manufacturing and services firms in 79 developing countries from the World Bank's Enterprise Surveys Database, this paper assesses how firm location determines the likelihood and extent of exporting in...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110829090011 http://hdl.handle.net/10986/3544 |
| Summary: | Using a cross-section of more than
40,000 manufacturing and services firms in 79 developing
countries from the World Bank's Enterprise Surveys
Database, this paper assesses how firm location determines
the likelihood and extent of exporting in developing
countries. Descriptive statistics confirm higher export
participation (but not intensity) for firms in core versus
non-core regions, despite the finding that firms in the core
assess many aspects of the investment climate more
negatively. Results from a probit model show that, in
addition to firm-specific characteristics, both regional
investment climate and agglomeration factors have a
significant impact on export participation. Specifically,
customs clearance and electricity quality matter for export
participation for manufacturing firms. Although localization
economies and export spillovers are associated with
increased exporting, the opposite is found for urbanization
economies for both manufacturing and services firms. The
analysis finds that firm-level determinants of exporting
matter more for firms located in non-core regions, while
regional determinants and agglomeration economies play a
larger role in core regions. The findings point to the
presence of congestion costs in the core, and suggest that
policy interventions to target export participation are
likely to have a greater impact if they are focused on core
regions over non-core regions, where firm-specific factors
predominate. Moreover, the importance of export spillovers
and localization economies highlights the potential value of
efforts to remove barriers to natural agglomeration both in
core and non-core regions, for example through investments
in infrastructure, the provision of social services, and
regional integration arrangements. |
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