This study investigates the relationship between firms’ export performance and prior investment experience in the corresponding country by using a novel dataset of Chinese firms. We find that a firm's export performance, in terms of value, quantity, unit price level and product varieties, is considerably better in destination countries where the firm has previously invested. The patterns are more pronounced when exporters are non‐state‐controlled or small‐sized firms. Our analysis also shows that such country‐specific outward foreign direct investment experience can facilitate firm exports by bridging country‐pair physical and cultural distances and overcoming contractual barriers in destination countries. The data further imply that the positive effect partly stems from the purpose of local production.
With an event study approach, this study examines the valuation effects of the US–China trade war. It is found that Chinese listed firms with American managers record lower announcement returns than their counterparts. This effect is heterogenous for firms with different foreign exposures. Specifically, the negative effect is more pronounced for firms exporting to the US market, while other foreign exposures, such as overseas direct investments and foreign shareholders mitigate the negative effects of American managers. These findings provide micro‐level evaluation of trade policy with the combination of stock market and corporate governance.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.