Firm heterogeneity, market choice and productivity: Evidence from foreign‐owned enterprises in China

This study examines the effects of firm heterogeneity on foreign‐owned enterprises’ ( FOE s) choices regarding serving the local market, undertaking assembly exports or undertaking ordinary exports. It also investigates the effects of serving these markets on productivity. Using a detailed firm–transaction level matched data set of FOE s in China covering 2000–07, the first‐stage estimation of propensity score matching ( PSM ) method reveals...