Cheng Chen, Claudia Steinwender, 30 April 2019

Firms around the world are facing increased import competition, especially from low-wage countries like China, but the effect on the productivity of impacted firms remains unclear. Using data from Spain, this column studies how firms under different types of management respond to an increase in competition, and shows that less-productive firms that are both family owned and managed see the greatest improvement in productivity. Their managers care more about the long-term survival of their firm, prompting additional effort when faced with an increased bankruptcy risk.

Katharine G. Abraham, Melissa Kearney, 17 October 2018

The employment rate among non-elderly adults in the US remains low by historical standards and in comparison with other rich countries. This column reviews the evidence on the main causes of the secular decline in employment since the turn of the century. Labour demand factors – notably import competition from China and the rise of industrial robots – emerge as the key drivers. Some labour supply and institutional factors also have contributed to the decline, but to a lesser extent.

Sónia Cabral, Pedro S. Martins, João Pereira dos Santos, Mariana Tavares, 30 September 2018

The labour market effects of import competition from China are becoming increasingly relevant. This column analyses both the direct and indirect labour market effects of rising international trade exposure to China, focusing on Portugal. It suggests that the wages and employment of Portuguese workers are negatively affected by China’s competition in third-country markets. Certain groups such as female, older, and less-educated workers, are particularly badly hit.

Stefan Thewissen, Olaf van Vliet, 06 September 2018

The recent revival of protectionism has prompted further interests in the domestic employment effects of imports, in particular from China. This column examines the association between Chinese imports and domestic employment effects in 17 sectors across 18 OECD countries with diverse labour market institutions. The results indicate that employment fell in sectors that are more exposed to imports from China, especially among low-skilled workers. 

David Autor, David Dorn, Gordon Hanson, Gary P. Pisano, Pian Shu, 20 March 2017

The discussion of the decline in US manufacturing during the 2016 presidential election campaign largely focused on job losses. This column examines the effects of Chinese import competition on another metric for the health of the US manufacturing sector – innovation.  Firms whose industries were exposed to a greater surge of Chinese import competition from 1991 to 2007 experienced a significant decline in their patent output as well as their R&D expenditures. While politicians’ ‘obsession’ with manufacturing is primarily due to job losses, an accompanying reduction in innovation may well affect economic growth in the longer term.

Miaojie Yu, 18 May 2016

When China opened up, Chinese income increased and China went from a poor to a middle-income country. In this video, Miajie Yu discusses the impact of trade liberalisation on firm productivity in China. Openness to trade had a big impact on processing trade – such as putting together iPhones – and now accounts for half of Chinese trade. This video was recorded in March 2016 during the Royal Economic Society’s Annual Conference held at the University of Sussex.

Italo Colantone, Rosario Crinò, Laura Ogliari, 04 December 2015

Influential studies have shown that trade liberalisation is associated with substantial adjustment costs for workers in import-competing jobs. This column uses UK data to shed light on one such cost that has not been considered to date – subjective well-being. Import competition is found to substantially raise mental distress, through worsened labour market conditions and increased stress on the job. These findings provide evidence of an important hidden cost of globalisation.

Raphael Auer, Andreas Fischer, 13 June 2008

Research using a novel empirical technique suggests that import competition from low-wage countries dampens US producer price inflation for manufactured goods by more than 2 percentage points annually.

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