Updated 3 April 2008

How to Use the Chinese Exporters’ Database Paul D. Ellis, Dept of Management & Marketing, Hong Kong Polytechnic University

What is the Chinese Exporters’ Database? The database is a compilation of descriptive data pertaining to 1,319 foreign market entries made by 494 Chinese firms in four different cities. As far as I know, the Chinese Exporters’ Database (CED) is the only publicly available, large N database providing firm-level data on patterns of internationalization. Why have a Chinese Exporters’ Database? What makes it unique? Research into the internationalization of the firm remains an important area of study for international business scholars. Yet studies that publish foreign market entry (FME) data tend to involve relatively small numbers making it difficult to draw conclusions about larger expansion patterns. For example, the most cited paper in the Journal of International Business Studies is Johanson and Vahlne’s (1977) essay on the internationalization process of the firm, which is based on an earlier study of 4 Swedish firms’ entries into 20 foreign markets (Johanson and Wiedersheim-Paul 1975). The number of FMEs in other studies is similarly small. Against these studies the CED stands out in terms of its size; Firm Internationalization Study

# Firms

# FMEs

Johanson and Wiedersheim-Paul (1975)

4

80

Engwall and Wallenstål (1988)

3

83

Ellis and Pecotich (2001)

8

31

Child, et al. (2002)

5

34

494

1,319

The Chinese Exporters’ Database

In addition to being small, most available FME databases are characterized by a Euro-centric bias – data have typically been collected from firms in Western nations. (Child, et al. (2002) is an exception.) Yet the world’s fastest-growing exporter is China. In the period 2000 – 2005, China’s exports grew at an annual average rate of 25 percent, more than four times the growth rate recorded for the rest of the world (World Bank 2007). As a result, China’s share of world trade has increased substantially. In the late 1970s when China began to normalize relations with the rest of the world, its external trade was worth around US$20b making it the world’s 32nd largest exporting nation. By 2005, China had jumped to third place with exports worth US$762b (WTO 2006). In 2006 China’s exports had increased 27% to $969 and it is likely that China has by now passed the US to become the world’s second biggest exporting nation (WTO 2007). This all suggests that Chinese exporters are among the world’s best at forging trade and investment links to new markets. If we wish to learn about firm internationalization, we would do well to study the behaviour of Chinese exporters.

Ellis, Paul D. (2008), “The Chinese Exporters’ Database,” Hong Kong Polytechnic University.

What can this database be used for? What have the data already been used for? The data were primarily collected to investigate patterns of firm internationalization. Parts of this database have already been used to analyse; -

the effects of distance-to-market on firm internationalization (see Ellis 2007) the moderating effect of psychic distance on the market size-entry sequence relationship (Ellis 2008, in press) the use of social ties in the search for international exchange partners (Ellis 2000, 2008)

Considerable scope remains for additional analysis. In particular, there is an opportunity to introduce other variables measured using secondary data. An example of how to do this can be found in Ellis (2007) where geographic and cultural distance data drawn from publicly available sources were combined with FME data found in the database. What’s in the database? There are 11 variables in the database: Label

Means

ID

Original questionnaire identification number

City

The city in China where data were collected; Hong Kong (2), Xian (3), Shanghai (4), Guangzhou (5)

Informant

Was the informant involved in setting up the FME? Note: search data are considered unreliable unless the informant was personally involved (see Ellis 2008).

FME

“Foreign market entry” or the export market. Informants were asked to identify country-markets. In some cases, non-country markets were identified (eg: Europe, Africa). Although imprecise, these FMEs have been retained as they were essential to determining entry sequence. Non-country markets are marked with an “X” to facilitate sorting.

Entry_date

Year of market entry (used to determine entry sequence). Responses range from 1957 – 2007. Some difficulties associated with sequencing entry dates were discussed in Ellis (2007).

Entry_prop

The proportion of the firm’s export income coming from this particular market. Responses range from 0 (for four markets where the firm was no longer active) to 1.00 (representing 100% of export income).

Exp_importance Respondents were asked to list their export markets in terms of their importance to the firm. (Note: this was not done in Hong Kong.) st

FME sequence

The order of market entry (where 1 = 1 market entered and so on). Responses range from 1 – 10.

WHO_initiated

Respondents were asked “Who first established contact between you and your customer in (export market)?” Five response options were provided; (1) we approached them, (2) they contacted us, (3) we were introduced by a mutual associate/acquaintance, (4) we met at a trade fair/exhibition, (5) don’t remember. (See Ellis and Pecotich (2001) for a discussion of these options.)

HOW_contact

Respondents were asked “How did you first identify your customer in (export market)?” Ten response options were offered (see below).

Search

Search type based on a post hoc reclassification of responses to the “How” question (see below).

2

Ellis, Paul D. (2008), “The Chinese Exporters’ Database,” Hong Kong Polytechnic University.

From the nine different methods of identifying exchange partners, four discrete search types can be identified: How did you first identify your customer in (export market)?: they are a relative or “old friend” 1(

)

2(

)

3(

)

4(

)

5(

)

6(

)

7(

)

8(

)

9(

)

10(

)

Search Type (post hoc) - Tie-based search

through personal contacts (eg: friends/ acquaintances)

-

Tie-based search

we knew them from previous job/business

-

Tie-based search

referral from an existing client

-

Tie-based search

they are a former classmate/neighbour

-

Tie-based search

in response to an advertisement

-

Advertising-based search

through market research/formal search

-

Formal search

we met at a trade fair/exhibition

-

Fair-based search

through govt/other official agency

-

Formal search

unknown/can’t remember

-

Unclassifiable

Notes on acronyms and market identifiers: EU = European Union, HK= Hong Kong, Korea = South Korea, Palestine = the Palestinian Territories, SEA = Southeast Asia, UAE = United Arab Emirates. Who can use the database? Anyone can use the database, but please provide a proper acknowledgement. I envisage the database may be of some interest to scholars and graduate students working in the following areas: firm internationalization, foreign market entry, China research, and China trade. How do I cite this database? Ellis, Paul D. (2008), “The Chinese Exporters’ Database,” the Hong Kong Polytechnic University. Website [insert link here] accessed on [insert download date here]. How were the data collected? High quality, firm-level FME data are notoriously difficult to collect. While basic entry data may be gleaned from companies’ annual reports, in-depth interviews are usually required if one wishes to learn how entrepreneurs sought and found buyers in new foreign markets. Interviews are timeconsuming and resource intensive. They can be hard to arrange if the relevant decision-makers have left the company and fruitless if respondents are reluctant to talk about their customers. (Some of the difficulties in collecting good FME data are reviewed in Ellis and Pecotich (2001) and Ellis (2008).) Despite these difficulties, all of the FME data contained in the CED were obtained via face-to-face interviews with senior managers. Interviews were usually conducted by research assistants based in the city in question. The CED is not the result of a single study, but is a composite of data collected from four separate studies (one per city). Each of these studies had unique aims but the questions used to measure FME activities were generally identical across the settings.

3

Ellis, Paul D. (2008), “The Chinese Exporters’ Database,” Hong Kong Polytechnic University.

Some basic facts about the data collection are as follows:

Date data collected # Firms # FMEs Industry Average firm size Interviews - language Interviewers (N) Duration (minutes)

Hong Kong

Study Setting Shanghai Xian

1998 38 156 Toy-makers 39 + 1,327* Cantonese 1 26.2

2004 215 294 Various 1,146 Mandarin ~20 39.6

2003 101 677 Various 1,388 Mandarin ~15 40.4

Guangzhou 2007 140 192 Garments/footwear 266 Cantonese/Mandarin ~15 30.2

* Most of the Hong Kong enterprises also ran much larger factories in southern China.

What if I have further questions about the database? Considerable information on the research activities which led to the compilation of the CED can be found in Ellis (2000, 2007, 2008, 2008 in press). If these papers do not answer your questions, send me an email: [email protected] References Child, J., Ng, S.H. and Wong, C. (2002) “Psychic distance and internationalization”, International Studies of Management and Organizations, 32(1): 36-56. Ellis, P.D. (2000), “Social ties and foreign market entry,” Journal of International Business Studies, 31(3): 443-469. Ellis, P.D. (2007), “Paths to foreign markets: Does distance to market affect firm internationalization?,” International Business Review, 16(5):573-593. Ellis, P.D. (2008), “Social ties and international opportunity recognition,” Hong Kong Polytechnic University working paper. (This can be found site here: http://myweb.polyu.edu.hk/~mspaul/ or here: http://paulellis08.googlepages.com/) Ellis, P.D. (2008, in press), “Does psychic distance moderate the market size-entry sequence relationship?” Journal of International Business Studies, 39(3). Ellis, P.D. & A. Pecotich (2001), “Social factors influencing export initiation in small and medium-sized enterprises,” Journal of Marketing Research, 38(Feb): 119-130. Engwall, L. and Wallenstål, M. (1988) “Tit for tat in small steps: The internationalization of Swedish banks”, Scandinavian Journal of Management, 4(3/4): 147-155. Johanson, J. and Vahlne, J.E. (1977), “The internationalization process of the firm: A model of knowledge development and increasing foreign market commitments,” Journal of International Business Studies, 8(1): 23-32. Johanson, J. and Wiedersheim-Paul, F. (1975) “The internationalization of the firm: Four Swedish cases”, Journal of Management Studies, (October), 305-322. World Bank (2007), World Development Indicators, website devdata.worldbank.org/dataonline/ accessed on 27 June 2007. WTO (2006) International Trade Statistics, website www.wto.org/english/res_e/statis_e/its2006_e/its06_bysubject_e.htm accessed on 27 June 2007. WTO (2007) International Trade Statistics, website www.wto.org/english/res_e/statis_e/its2007_e/its07_world_trade_dev_e.htm accessed on 26 March 2008. 4