Heterogeneous effects of Chinese import competition on Chilean manufacturing plants

Andrés César and Guillermo Falcone

MPRA Paper from University Library of Munich, Germany

Abstract: We study the effect of a trade-induced competitive shock, defined as rising import competition from China, on Chilean manufacturing plants. For identification, we exploit the fact that in 1995–2006, Chinese import penetration increased sharply in Chile, but this expansion varied widely across manufacturing industries. We use Chinese export growth in high-income industry-country pairs as an instrument for Chinese import penetration. Our results suggest that plants in more exposed industries exhibit relative declines in revenue, employment, and physical capital and face a higher probability of exiting the panel than comparable plants in less exposed industries. All these effects are concentrated among establishments with low initial levels of productivity.

Keywords: Trade shock; Chinese import penetration; manufacturing plants; Chile; productivity. (search for similar items in EconPapers)
JEL-codes: D22 F14 (search for similar items in EconPapers)
Date: 2017-08, Revised 2019-12
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Published in Economia 2.20(2020): pp. 1-60

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Related works:
Journal Article: Heterogeneous Effects of Chinese Import Competition on Chilean Manufacturing Plants (2020)
Working Paper: Heterogeneous effects of Chinese import competition on Chilean manufacturing plants (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:110075

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