Heterogeneous effects of Chinese import competition on Chilean manufacturing plants

César, Andrés and Falcone, Guillermo (2020) Heterogeneous effects of Chinese import competition on Chilean manufacturing plants. Economía, 20 (2). 1 - 60. ISSN 1529-7470

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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.

Item Type:	Article
Official URL:	https://economia.lse.ac.uk/
Additional Information:	© 2020 LACTEA
Divisions:	LSE
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce
JEL classification:	F - International Economics > F1 - Trade > F14 - Country and Industry Studies of Trade D - Microeconomics > D2 - Production and Organizations > D20 - General
Date Deposited:	03 Jul 2024 17:12
Last Modified:	03 Jul 2024 17:12
URI:	http://eprints.lse.ac.uk/id/eprint/123135

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