Export Performance, Foreign Ownership, and Trade Policy Regime: Evidence from Thai Manufacturing
Jongwanich, Juthathip; Kohpaiboon, Archanun | December 2008
Abstract
This paper examines the determinants of a firm’s export decision and the role of
multinational corporations (MNCs) in generating export spillovers to domestically
owned firms based on cross-sectional econometric analysis of the manufacturing
sector in Thailand. The role of market structure in determining firms’ export
decisions is also emphasized in the study. The key finding is that MNCs tend
to be more export-oriented than indigenous firms and the entry of the former
stimulates the latter to become involved in the production of exports, i.e., the
presence of MNCs export spillovers. However, the impact of MNCs on export
activity/spillovers is not automatic, but depends on the trade policy regime.
A restricted trade policy, especially tariff protection, could retard the process
of MNCs enhancing export spillovers and overall export activity. Competition
fostered by open trade policies tend to be required if a high level of MNC
participation is to be translated into higher export activity/spillovers. In addition,
the negative direct effect of high tariff rates on export activity/spillovers highlights
the relative importance of trade policy neutrality on firms’ export decisions and
export spillovers.
Citation
Jongwanich, Juthathip; Kohpaiboon, Archanun. 2008. Export Performance, Foreign Ownership, and Trade Policy Regime: Evidence from Thai Manufacturing. © Asian Development Bank. http://hdl.handle.net/11540/1515.ISSN
1655-5252
Keywords
Free Trade
Trade
Trade Agreements
Regional Economic Integration
Exports
Economic integration
Exports
Economic integration
Distribution
Economic integration
Development Bank
Trade policy
Trade policy
Euro
Inflation
Business
Finance
Free trade
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