Highways and Firms' Exports: Evidence from China
1Dan Liu：Faculty of Economics and Management,East China Normal University
2Liugang Sheng:Department of Economics and HKIAPS,The Chinese University of Hong Kong,
3Miaojie Yu:Faculty of Economics, LiaoningUniversity
Abstract：This article investigates the impact of highway networkson Chinese firms’ exports. We construct firm-level mea-sures of highway access using GIS information on firmlocations and highway routes and adopt an instrumen-tal variable approach to deal with the endogeneity issue.The analysis finds that improvements in highway accesssignificantlypromotefirms’exports,aftercontrollingforfirm characteristics and unobservable city and indus-try time-varying factors. Highway access helps firms toexpand the scope of their exports and imports as well.More interestingly, the positive effects of highway accesson exports are stronger for less productive firms. Withgreater highway access, less productive firms lower theirmarkups while more productive firms experience anincrease in average markups.KEYWORDSexports, GIS, highways, markup, product scope
JEL CLASSIFICATIONF14, H54, L25, L92
