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International Competition and Industrial Performance: Allocative Efficiency, and Turbulence

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Author Info
John R. Baldwin
Richard E. Caves

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Abstract

Trade experts generally favorable effects on the performance of domestic manufacturing industries in the dimensions of allocative and productive efficiency. We review theory and recent evidence on these linkages and also explore a third effect - on the turbulence of competitive conditions and the turnover of business units. Calculations using primary census records for Canada over 1973-1992 indicate, with time and industry effect, controlled, market-share turnover, entry, exit and mergers all increase with trade exposure. The effect is tied to market structures of differentiated products but broad international disturbances (North America Free Trade Area) also have significant effects. The normative significant of turbulence is mixed by has important positive components.

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Paper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 1809.

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Date of creation: 1997
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Handle: RePEc:fth:harver:1809

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  1. Michael Spence, 1978. "Tacit Co-ordination and Imperfect Information," Canadian Journal of Economics, Canadian Economics Association, vol. 11(3), pages 490-505, August. [Downloadable!] (restricted)
  2. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-46, August. [Downloadable!] (restricted)
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  3. Caves, Richard E & Porter, Michael E, 1978. "Market Structure, Oligopoly, and Stability of Market Shares," Journal of Industrial Economics, Blackwell Publishing, vol. 26(4), pages 289-313, June. [Downloadable!] (restricted)
  4. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
  5. Baldwin,John R. & Gorecki,Paul & Caves,Richard E. & Dunne,Tim & Haltiwanger John, 1995. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521465618, 12.
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  6. Yamawaki, Hideki, 1986. "Exports, Foreign Market Structure, and Profitability in Japanese and U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 618-27, November. [Downloadable!] (restricted)
  7. Katics, Michelle M & Petersen, Bruce C, 1994. "The Effect of Rising Import Competition on Market Power: A Panel Data Study of U.S. Manufacturing," Journal of Industrial Economics, Blackwell Publishing, vol. 42(3), pages 277-86, September. [Downloadable!] (restricted)
  8. Robert H. McGuckin & Sang V. Nguyen, 1995. "On Productivity and Plant Ownership Change: New Evidence from the Longitudinal Research Database," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 257-276, Summer. [Downloadable!] (restricted)
  9. Romer, Paul, 1994. "New goods, old theory, and the welfare costs of trade restrictions," Journal of Development Economics, Elsevier, vol. 43(1), pages 5-38, February. [Downloadable!] (restricted)
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  10. Pugel, Thomas A, 1980. "Foreign Trade and US Market Performance," Journal of Industrial Economics, Blackwell Publishing, vol. 29(2), pages 119-29, December. [Downloadable!] (restricted)
  11. Baldwin, John R., 1996. "Productivity Growth, Plant Turnover and Restructuring in the Canadian Manufacturing Sector," Analytical Studies Branch Research Paper Series 1995087e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  12. Yamawaki, Hideki, 1991. "Exports and Foreign Distributional Activities: Evidence on Japanese Firms in the United States," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 294-300, May. [Downloadable!] (restricted)
  13. Yamawaki, Hideki & Audretsch, David B, 1988. "Import Share under International Oligopoly with Differentiated Products: Japanese Imports in U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 569-79, November. [Downloadable!] (restricted)
  14. MacDonald, James M, 1994. "Does Import Competition Force Efficient Production?," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 721-27, November. [Downloadable!] (restricted)
  15. Caves, Richard E., 1985. "International trade and industrial organization: Problems, solved and unsolved," European Economic Review, Elsevier, vol. 28(3), pages 377-395, August. [Downloadable!] (restricted)
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