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Exposure to Low-wage Country Imports and the Growth of Japanese Manufacturing Plants

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  • Anna Maria MAYDA
  • NAKANE Masato
  • STEINBERG, Chad
  • YAMADA Hiroyuki

Abstract

Japan's trade structure has changed remarkably in the past two decades with an increase of imports of manufactured goods from low-wage countries, in particular China. This has contributed to the impression of a hollowing out effect in manufacturing. Against this background, we analyze the role of international trade in the reallocation of Japanese manufacturing within and across industries from 1989 to 2006. We estimate the impact of industry exposure to low-wage country imports on Japanese plants' survival and employment growth. The analysis is conducted with a panel dataset of over 4.5 million observations on Japanese manufacturing plants. Our results are broadly consistent with the factor proportions model of trade, as we find that plant survival and growth are negatively associated with industry exposure to low-wage country imports.

Suggested Citation

  • Anna Maria MAYDA & NAKANE Masato & STEINBERG, Chad & YAMADA Hiroyuki, 2012. "Exposure to Low-wage Country Imports and the Growth of Japanese Manufacturing Plants," Discussion papers 12038, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:12038
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    Cited by:

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    2. ITO Koji, 2013. "Impact of Growing Imports: A comparison of international and domestic firms in the Japanese manufacturing industry (Japanese)," Discussion Papers (Japanese) 13034, Research Institute of Economy, Trade and Industry (RIETI).
    3. Daniel Goya, 2019. "Chinese competition and network effects on the extensive margin," Working Papers 2019-01, Escuela de Negocios y Economía, Pontificia Universidad Católica de Valparaíso.

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