MNE spillovers and local export dynamics in China: the role of relatedness and forward–backward linkages

Abstract

This article investigates how MNEs influence the export behavior of domestic firms in the context of China. We conceptually disentangle different MNE spillovers related to local export dynamics, linking in a unique framework specific spillover mechanisms, channels, activation conditions and type of knowledge conveyed. Empirically, our analysis relies on a panel dataset containing all Chinese manufacturing firms in the period 2000–2007. The results show that relatedness linkages matter in the context of export quantity, while forward–backward linkages matter for the sophistication of export. These findings suggest that relatedness linkages convey mainly marketing-related knowledge spillovers, while forward–backward linkages are diffusing mainly product-related knowledge spillovers.