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David Versus Goliath: The Impact of Chinese Competition on Developing Countries

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  • Álvarez, Roberto
  • Claro, Sebastián

Abstract

Summary We use detailed Chilean plant-level data from 1990 to 2000 to study the impact of Chinese import competition in manufacturing industries. We study whether China's imports have been associated with a downsizing of manufacturing plants or whether firms have escaped Chinese competition through changes in output mix, productivity catch-up, or increased exports. Our results show that imports from China have negatively affected employment growth on surviving plants, and increased the probability of exit. In contrast to previous evidence for the United States, we do not find evidence that manufacturing plants have adjusted by producing more sophisticated goods or by exporting.

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  • Álvarez, Roberto & Claro, Sebastián, 2009. "David Versus Goliath: The Impact of Chinese Competition on Developing Countries," World Development, Elsevier, vol. 37(3), pages 560-571, March.
    • Handle: RePEc:eee:wdevel:v:37:y:2009:i:3:p:560-571
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    Cited by:

    1. Roberto Álvarez & Sebastián Claro, 2006. "The china price: evidence and some implications," Estudios de Economia, University of Chile, Department of Economics, vol. 33(2 Year 20), pages 117-140, December.
    2. Dilip K. Das, 2008. "A Chinese renaissance in an unremittingly integrating global economy," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(1), pages 39-46, April.
    3. Larry D. Qiu & Chaoqun Zhan, 2016. "Special Section: China's Growing Trade and its Role to the World Economy," Pacific Economic Review, Wiley Blackwell, vol. 21(1), pages 45-71, February.
    4. 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).
    5. Christian K. Darko & Giovanni Occhiali & Enrico Vanino, 2018. "The Chinese are Here: Firm Level Analysis of Import Competition and Performance in Sub-Saharan Africa," Working Papers 2018.14, Fondazione Eni Enrico Mattei.
    6. Roberto Álvarez & Sebastián Claro, 2007. "On the Sources of China’s Export Growth," Working Papers Central Bank of Chile 426, Central Bank of Chile.
    7. Roberto Álvarez & Luis Opazo, 2008. "Chinese Penetration and Importer Country Wages: Microevidence From Chile," Working Papers Central Bank of Chile 473, Central Bank of Chile.
    8. Bauwens, Thomas & Lemaître, Andreia, 2014. "Popular Economy in Santiago de Chile: State of Affairs and Challenges," World Development, Elsevier, vol. 64(C), pages 65-78.
    9. 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).

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