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Survival of the best fit: exposure to low-wage countries and the (uneven) growth of U.S. manufacturing plants

Bernard, Andrew B., Bradford Jensen, J. and Schott, Peter K. (2003) Survival of the best fit: exposure to low-wage countries and the (uneven) growth of U.S. manufacturing plants. CEPDP, 584. Centre for Economic Performance, London School of Economics and Political Science, London, UK. ISBN 0753016451

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Abstract

This paper examines the role of international trade in the reallocation of U.S. manufacturing activity within and across industries from 1977 to 1997. It introduces a new measure of industry exposure to international trade, motivated by the Heckscher-Ohlin model, which focuses on where imports originate rather than their overall level. Results demonstrate that plant survival as well as output and employment growth are negatively associated with the share of industry imports sourced from the world ¿s lowest-wage countries. Within industries, activity is reallocated towards capital- intensive plants. Plants are also more likely to alter their product mix (i.e. switch industries) in response to trade with low-wage countries. Plants altering their product mix switch to industries that are more capital and skill- intensive.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk
Additional Information: © 2003 the authors
Library of Congress subject classification: H Social Sciences > HF Commerce
H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification and Scope, Age, Profit, and Sales
F - International Economics > F1 - Trade > F14 - Country and Industry Studies of Trade
F - International Economics > F1 - Trade > F11 - Neoclassical Models of Trade
L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 584
Date Deposited: 28 Jul 2008 13:34
URL: http://eprints.lse.ac.uk/20028/

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