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Foreign competition and quality sorting: Overlaps in US and Chinese exports

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  • Karsten Mau

Abstract

The paper studies the performance of US exports conditional on presence and magnitude of Chinese exports in the same foreign markets. Outcomes within product—destination markets are analysed in a panel covering 4,219 products, 67 destinations and 11 years (1996–2006). Generally, an increasing exposure to Chinese export competition is related with lower US export revenues, quantity and market shares. Robustness checks support existence and direction of a causal relationship. Other outcomes, such as product switching, market exit and export unit value adjustments are less clear‐cut. Detailed analyses of responses in individual destinations and product categories suggest that this is, partly, because Chinese and US exports compete only in some markets. In product markets where lower US export quantity coincides with adjustments of export unit value, quality sorting appears to be prevalent. In some cases, however, lower export unit values appear to help export quantities remain unchanged. Overall, the average estimated displacement effects obtained from a pooled sample mask substantial panel‐unit heterogeneity.

Suggested Citation

  • Karsten Mau, 2019. "Foreign competition and quality sorting: Overlaps in US and Chinese exports," The World Economy, Wiley Blackwell, vol. 42(8), pages 2300-2325, August.
    • Handle: RePEc:bla:worlde:v:42:y:2019:i:8:p:2300-2325
    DOI: 10.1111/twec.12791
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    Cited by:

    1. Ciani, Andrea & Mau, Karsten, 2023. "Delivery times in international competition: An empirical investigation," Journal of Development Economics, Elsevier, vol. 161(C).
    2. Cunha, André Moreira & Lélis, Marcos Tadeu Caputi & Haines, Andrés Ernesto Ferrari & Franke, Luciane, 2023. "Exports of manufactured goods and structural change: Brazil in the face of Chinese competition," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 1-12.
    3. Ciani, Andrea & Mau, Karsten, 2020. "When Time Matters: Eastern Europe's Response to Chinese Competition," Research Memorandum 007, Maastricht University, Graduate School of Business and Economics (GSBE).

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