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Import competition from and offshoring to China: a curse or blessing for firms?

Mion, Giordano and Zhu, Linke (2013) Import competition from and offshoring to China: a curse or blessing for firms? Journal of International Economics, 89 (1). pp. 202-215. ISSN 0022-1996

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Abstract

We use Belgian manufacturing firm-level data over the period 1996-2007 to analyze the impact of imports from different origins on firm employment growth, exit, and skill upgrading. For this purpose, we use both industry-level and firm-level imports by country of origin and further distinguish between firm-level offshoring of final versus intermediate goods. Results indicate that China is different from both other low-wage and OECD countries. Industry-level import competition from China reduces firm employment growth and induce skill upgrading in low-tech manufacturing industries. On the other hand, import competition has no effect on firm survival, while offshoring of finished goods to China actually increases firms' probability of survival. In terms of skill upgrading, the effect of Chinese imports is large. Import competition from China accounts for 27% (48%) of the total observed increase - within and between firms - in the share of non-production (highly educated) workers in low-tech Belgian manufacturing over our period of analysis. Offshoring to China further accounts for a small but significant increase in the share of non-production workers.

Item Type: Article
Official URL: http://www.journals.elsevier.com/journal-of-intern...
Additional Information: © 2012 Elsevier B.V.
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L21 - Business Objectives of the Firm
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 10 Aug 2012 10:27
URL: http://eprints.lse.ac.uk/45205/

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