1. Department of Economics, Southwestern University of Finance and Economics, Chendu 611130, China 2. Department of Economics, Carleton University, Ottawa, Ontario, K1S 5B6, Canada 3. International Business School, Shanghai University of International Business and Economics, Shanghai 201620, China
Using Chinese manufacturing data between 1998 and 2007, this paper investigates the impact of agglomeration on firm’s export behavior. It is found that the agglomeration of manufacturing industries in China over this period increases firm’s export probability as well as its export volume, and the impact is larger for more efficient firms. However, the impact on firm’s export volume depends on the degree of agglomeration. When the degree of agglomeration is low, an increase in agglomeration would expand firm’s export volume but the impact will be diminishing and even turns negative if the degree of agglomeration is already very high.
