Research On The Impact Of Contiguous Effect On Firm’s Selections Of Export Markets

China’s economy has entered the "New Normal",how to maintain the steady and healthy development of China’s foreign trade in the context of low-speed development of the economy has become an urgent problem to be solved.However,stabilizing exports not only requires us to continue to consolidate and deepen existing export relations,but also to break through the "zero points" in the trade matrix,so as to realize the export expansion of firms.In the September and the October of 2013,President Xi successively proposed the cooperation initiatives of "the Silk Road Economic Belt" and "21st-Century Maritime Silk Road",which will undoubtedly have an important strategic impact on the trade development between China and the countries along "the Belt and Road".In view of that,this paper adopts the customs data of China and 59 countries along “the Belt and Road” from 2000 to 2013 matching with industrial enterprises data,and based on the combination of firmmarket,it examines the impact of contiguous effect between the old and new export markets on the selections of export markets of firms(including entering into new markets and exiting from existing markets).In this paper,theoretical analysis was combined with empirical research.In the theoretical analysis part,the existing related researches of the selections of the export markets of firms,the contiguous effect and the relationship between them were summarized,and then the theoretical mechanism of the export markets selections was explored according to the heterogeneous-firm trade model and the spillover effect of firms’ export experience.In the empirical research part,this paper constructed "Contiguous market dummy","Exports to contiguous markets","Exports to region" and "Marginal distance" to measure the contiguous effect between old and new export markets,and then analyze comparatively its different impacts on entering into new markets and exiting from existing markets.The empirical results show that: 1)On the whole,the contiguous effect between new and old export markets of firms is conducive to improving the rate of entering into new export markets and reducing the rate of exiting from export markets.2)Specifically,if the new and old export markets are contiguous to each other,"Exports to contiguous markets" increases by 1%,"Exports to region" increases by 1% or "Marginal distance" decreases by 1%,the rate of entering into new markets will increase by 4.7%,0.3%,0.03% and 3.4% respectively,and the rate of exiting from existing markets will decrease by 7.5%,1.8%,1.2% and 0.3% respectively.3)To some extent,the contiguous effect weakens the impact of productivity on entering into export markets.4)The risk of exiting from the market entered in the last year is high,but the contiguous effect has some hindrance effect on firms’ exiting from the market entered in the previous year.5)The impacts of the contiguous effect on the selections of export markets of firms are heterogeneous in the classified sample based on different firm natures,but the results obtained by different econometric methods in the full sample regression are consistent.Based on the above conclusions,the corresponding policy recommendations are given at the end of this paper.