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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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File URL: http://www.sciencedirect.com/science/article/B6VC6-4TTNCJN-2/2/beb4520cb8cf8ad89cb134c047e68424
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Article provided by Elsevier in its journal World Development.

Volume (Year): 37 (2009)
Issue (Month): 3 (March)
Pages: 560-571

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Handle: RePEc:eee:wdevel:v:37:y:2009:i:3:p:560-571
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

Keywords: China import competition manufacturing plants;

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  1. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
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  12. 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.
  13. Ernesto Lopez-Cordova & Alejandro Micco & Danielken Molina, 2008. "How Sensitive are Latin American Exports to Chinese Competition in the U.S. Market," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
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Cited by:

  1. 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).
  2. 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.
  3. Roberto Álvarez & Sebastián Claro, 2007. "On the Sources of China’s Export Growth," Working Papers Central Bank of Chile 426, Central Bank of Chile.
  4. 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.
  5. 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).
  6. Dilip K. Das, 2008. "A Chinese renaissance in an unremittingly integrating global economy," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 9(1), pages 39-46, 04.
  7. 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.

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