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Plant exit and U.S. imports from low-wage countries

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  • Rigby, David L.
  • Kemeny, Thomas
  • Cooke, Abigail

Abstract

Over the past twenty years, imports to the U.S. from low-wage countries have increased dramatically. In this paper we examine how low-wage country import competition in the U.S. influences the probability of manufacturing establishment closure. Confidential data from the U.S. Bureau of the Census are used to track all manufacturing establishments between 1992 and 2007. These data are linked to measures of import competition built from individual trade transactions. Controlling for a variety of plant and firm covariates, we show that low-wage import competition has played a significant role in manufacturing plant exit. Analysis employs fixed effects panel models running across three periods: the first plant-level panels examining trade and exit for the U.S. economy. Our results appear robust to concerns regarding endogeneity.

Suggested Citation

  • Rigby, David L. & Kemeny, Thomas & Cooke, Abigail, 2017. "Plant exit and U.S. imports from low-wage countries," International Economics, Elsevier, vol. 149(C), pages 27-40.
    • Handle: RePEc:eee:inteco:v:149:y:2017:i:c:p:27-40
    DOI: 10.1016/j.inteco.2016.09.001
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    More about this item

    Keywords

    F14; F15; F16; L6; International trade; Low-wage country import competition; Plant exit;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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