Impacts of Competitive Position on Export Propensity and Intensity: An Empirical Study of Manufacturing Firms in China

Abstract

We examine the impacts of competitive industry position on firms’ export propensity and intensity in China. Drawing on the resource-based view and the structure-conduct-performance paradigm of firm behavior, we investigate whether firms with competitive industry position through cost leadership or differentiation strategy have different export behaviors. We use a longitudinal data of 213,662 manufacturing firms in China from 1998 to 2005 to show that firms that have developed competitive advantages in the domestic market are more likely to export and have higher levels of export intensity. Indigenous and foreign manufacturing firms exhibit different patterns of export behaviors. Foreign firms with differentiation advantages focus on local market expansion instead of seeking opportunity in export markets.