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Industry Dynamics and Competition from Low-Wage Countries: Evidence on Italy

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Listed author(s):
  • Stefano Federico

Abstract

type="main" xml:id="obes12023-abs-0001"> This article analyses the effect of competition from low-wage countries on domestic activity, using data on 230 Italian manufacturing sectors between 1995 and 2007. It finds that low-wage import penetration is negatively related to employment and other measures of activity. The effect is significantly smaller in more skill, capital and R&D-intensive sectors and in more vertically differentiated sectors. There is also evidence of significant effects of low-wage competition through inter-industry linkages: employment is negatively related to low-wage import penetration in downstream sectors but positively related to low-wage import penetration in upstream sectors.

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File URL: http://hdl.handle.net/10.1111/obes.2014.76.issue-3
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Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics and Statistics.

Volume (Year): 76 (2014)
Issue (Month): 3 (06)
Pages: 389-410

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Handle: RePEc:bla:obuest:v:76:y:2014:i:3:p:389-410
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Find related papers by JEL classification:
  • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
  • F14 - International Economics - - Trade - - - Empirical Studies of Trade
  • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
  • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis

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Cited by:

  1. Alessia Lo Turco & Daniela Maggioni, 2013. "On the Role of Imports in Enhancing Manufacturing Exports," The World Economy, Wiley Blackwell, vol. 36(1), pages 93-120, 01.
  2. David H. Autor & David Dorn & Gordon H. Hanson, 2016. "The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 205-240, October.
  3. 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).
  4. Matteo Bugamelli & Silvia Fabiani & Enrico Sette, "undated". "The age of the dragon: Chinese competition and the pricing behavior of the Italian firms," Working Papers 4, Department of the Treasury, Ministry of the Economy and of Finance.
  5. Matteo Bugamelli & Silvia Fabiani & Enrico Sette, 2015. "The Age of the Dragon: The Effect of Imports from China on Firm‐Level Prices," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(6), pages 1091-1118, 09.
  6. Joanna Wolszczak-Derlacz & Aleksandra Parteka, 2016. "The Effects Of Offshoring To Low-Wage Countries On Domestic Wages – A Worldwide Industrial Analysis," GUT FME Working Paper Series A 36, Faculty of Management and Economics, Gdansk University of Technology.

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