The impact on the growth of China clothing exports towards Asian developing countries

This paper illustrates the gravity model to investigate how the growth of China’s clothing exports is displacing the exports of other Asian developing countries since the 1990s. Aggregate analyses were undertaken, and the endogeneity of Chinese exports were accounted by applying instrumental variables with country fixed effects. It was found that there was a negative impact of China’s emergence on clothing exports from other Asian developing countries. Further, we explored if the displacement effect varies across Asian countries and the result showed that a more pronounced effect was found in low-income than in high-income Asian countries. Therefore, the export competitiveness of China’s neighbours, both more and less developed Asian countries, are influenced by the emergence of China in clothing Trade. Academic and managerial implications are also included