Foreign Competition and Small-Firm Entry in US Manufacturing
AbstractIn our increasingly globalized economy, the growth and profit prospects of domestic firms, especially small firms, seem clearly impacted by competitive pressures from foreign firms. This article analyzes annual data for 1989-1998 for 140 3-digit SIC manufacturing industries and for 1998-2004 for 86 4-digit NAICS industries on establishment -- plant-level -- births by small firms in several size categories. The major finding is that international pressures, in the form of import share weighted exchange rate appreciation, seem to lead to reduced rates of smallest-firm entry in manufacturing, though the magnitudes of these effects are smaller than sometimes discussed (and there is the suggestion that dollar appreciation may actually benefit small firm entry through access to cheaper inputs where the final product import threat is weak).
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Bibliographic InfoPaper provided by American University, Department of Economics in its series Working Papers with number 2009-04.
Date of creation: Mar 2009
Date of revision:
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Web page: http://www.american.edu/cas/economics/
small firms; entry; foreign competition; exchange rates;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-05 (All new papers)
- NEP-BEC-2009-12-05 (Business Economics)
- NEP-COM-2009-12-05 (Industrial Competition)
- NEP-CSE-2009-12-05 (Economics of Strategic Management)
- NEP-ENT-2009-12-05 (Entrepreneurship)
- NEP-SBM-2009-12-05 (Small Business Management)
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