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Sensitivity of Domestic Production to Import Competition: Evaluation at Different Levels of Aggregation

Author

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  • Eiichi Tomiura

    (Kobe University)

Abstract

This paper examines the impact of import competition on domestic production by exploiting the newly constructed longitudinal firm-level monthly data of Japanese products. The firm-level estimates are compared with those based on data at different levels of aggregation (2-digit industry and 7-digit product). The results show that the aggregation effect, both through product coverage and through inter-firm heterogeneity, affects the estimates. The sensitivity of production varies substantially from firm to firm even within the same industry. By linking this intra-industry variability with domestic price differentials, this paper finds that highly sensitive to import competition is production of relatively low-priced products.

Suggested Citation

  • Eiichi Tomiura, 2002. "Sensitivity of Domestic Production to Import Competition: Evaluation at Different Levels of Aggregation," Kobe Economic & Business Review, Research Institute for Economics & Business Administration, Kobe University, vol. 46, pages 73-90, February.
    • Handle: RePEc:kob:review:feb2002::v:46:p:73-90
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    More about this item

    Keywords

    import competition; longitudinal firm-level data; aggregation; vertical differentation;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments

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