Abstract: How to maintain the normal growth of Chinese exports has become the current issue of China’s external economic during the post-financial crisis period. Based on the CEPII-BACI dataset of Chinese HS six-digit product export trade data from 1995 to 2010, this paper uses the Logit Regression Model to explore the relationship between prior export duration and new market entry. According to our empirical study, we arrive at the following conclusions that prior export duration can promote products to enter new market, and when export duration lasts 1 year longer, the probability of entering a new market will increase by 0.17 time. But when we join the square of export duration, we find that there exists a U-shaped effect between prior export duration and new market entry, which means that prior export duration increases the likelihood of new market entry at the initial stage, but this effect diminishes with time, and when the export duration arrives at a critical value, the positive effect will disappear. This finding suggests that government should appropriately encourage firms to continue the relationship of existing trade flows, and establish relationship with new trading partners, thus to insure that China’s exports are in a sustainable and stable development.
Keywords: Export Duration, Logit Regression Model, New Market Entry
source:Finance & Trade Economics ,No.6,2014