Import competition from and offshoring to China: A curse or blessing for firms?

Mion, Giordano; Zhu, Linke

doi:10.1016/j.jinteco.2012.06.004

Cited by 192 publications

(216 citation statements)

References 46 publications

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“…However, contrary to what observed for other high-income countries (Bloom et al, 2011;Mion and Zhu, 2011;Martin and Méjean, 2011), we find that Italy has followed a very specific strategy to face Chinese competition. Instead of changing sector of specialization moving up to the technology ladder, Italy has kept its specialization in traditional sectors and has upgraded the quality of its low-tech and labor-intensive products, when in direct competition with Chinese ones.…”

Section: Table 5 Herecontrasting

confidence: 99%

China’s competition and the export price strategies of developed countries

Giovannetti

Sanfilippo

2016

International Review of Applied Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper analyzes the impact of Chinese competition on developed countries export prices, with a focus on Italy. After a theoretical discussion of the channels affecting export prices in presence of competitors from low income countries, we estimate the pricing behavior of two major manufacturing sectors, consumer goods and machinery, distinguishing destination markets according to their income level. Results show that export competition from China has affected Italian price strategies over the period 2000-08, in an idiosyncratic way according to the income level of importers, sector and technology level of products exported. Contrary to what observed for other high-income countries, we find that Italy has followed a very specific strategy to face Chinese competition. Instead of changing "between sector", moving up to the technology ladder, Italy has kept its specialization in traditional sectors and has upgraded the quality of its low-tech and laborintensive products, when in direct competition with Chinese ones. For higher technology products, on the other hand, it has adjusted prices downward to reduce Chinese competitive pressure, especially in segments where it does not hold a comparative advantage, while it has fostered differentiation only for some niche products within the sectors with higher specialization. Terms of use: Documents in JEL:F10, F14 Keywords: China, export price competition, Italy Abstract This paper analyzes the impact of Chinese competition on developed countries export prices, with a focus on Italy. After a theoretical discussion of the channels affecting export prices in presence of competitors from low income countries, we estimate the pricing behavior of two major manufacturing sectors, consumer goods and machinery, distinguishing destination markets according to their income level. Results show that export competition from China has affected Italian price strategies over the period 2000-08, in an idiosyncratic way according to the income level of importers, sector and technology level of products exported. Contrary to what observed for other high-income countries, we find that Italy has followed a very specific strategy to face Chinese competition. Instead of changing "between sector", moving up to the technology ladder, Italy has kept its specialization in traditional sectors and has upgraded the quality of its low-tech and laborintensive products, when in direct competition with Chinese ones. For higher technology product...

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Section: Table 5 Herecontrasting

confidence: 99%

China’s competition and the export price strategies of developed countries

Giovannetti

Sanfilippo

2016

International Review of Applied Economics

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“…In the face of increased competition from imports, domestic firms may 'defensively innovate' by upgrading capital stock, upgrading skills and reducing employment (Acemoglu, 2002;Bloom, Draca, Reenen, 2011;Mion & Zhu, 2013;Thoenig & Verdier, 2003;Wood, 1994;). Aggregate industry productivity is also expected to rise as less efficient firms exit or experience relatively large declines in output in the face of import competition (Bernard, Jensen, & Schott, 2006;Melitz, 2003;Pavcnik, 2002).…”

Section: Trade and Technologymentioning

confidence: 99%

The Impact of Chinese Import Penetration on the South African Manufacturing Sector

Edwards

Jenkins

2015

The Journal of Development Studies

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This article uses a Chenery-type decomposition and econometric estimation to evaluate the impact of Chinese trade on production and employment in South African manufacturing from 1992 to 2010. The results suggest that increased import penetration from China caused South African manufacturing output to be 5 per cent lower in 2010 than it otherwise would have been. The estimated reduction of total employment in manufacturing as a result of trade with China is larger -in 2010 about 8 per cent -because the declines in output were concentrated on labour-intensive industries and because the increase in imports raised labour productivity within industries.

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“…This includes papers that have studied the impact of Chinese import competition on economic variables such as manufacturing employment (Pierce andSchott 2012, Autor et al 2013), worker earnings (Pessoa 2014), skill upgrading Woo 2005, Mion andZhu 2013), firm and product selection (Iacovone et al 2013) and innovation (Bloom et al 2011). There are a much smaller number of papers which, like this paper, also take account of demand-side effects.…”

Section: Introductionmentioning

confidence: 99%

Winners and losers from a commodities-for-manufactures trade boom

Costa¹,

Garred

Pessoa

2016

Journal of International Economics

134

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A recent boom in commodities-for-manufactures trade between China and other developing countries has led to much concern about the losers from rising import competition in manufacturing, but little attention on the winners from growing Chinese demand for commodities. Using census data for Brazil, we find that local labour markets more affected by Chinese import competition experienced slower growth in manufacturing wages and in-migration rates between 2000 and 2010, and greater rises in local wage inequality. However, in locations benefiting from rising Chinese demand, we observe higher wage growth, lower takeup of cash transfers and positive effects on job quality.

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Import competition from and offshoring to China: A curse or blessing for firms?

Cited by 192 publications

References 46 publications

China’s competition and the export price strategies of developed countries

China’s competition and the export price strategies of developed countries

The Impact of Chinese Import Penetration on the South African Manufacturing Sector

Winners and losers from a commodities-for-manufactures trade boom

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