Destination Market Switching and Export Performance——Firm-Level Evidence from China

We examine destination market switching (DMS) in exports and the possible mechanisms behind, using Chinese cases and data. We find that DMS is pervasive and frequent among Chinese exporters, especially among multi-destination exporters, and implicit switching plays a key role. The switching behavior helps mitigate the negative impacts of uncertainty on the export performance both at the firm- and sector-levels. However, the impacts exhibit large heterogeneity depending on the type of uncertainty, firm ownership, firm age, product features, destination and switching direction