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Open AccessJournal ArticleDOI

Survival of the Best Fit: Exposure to Low-Wage Countries and the (Uneven) Growth of U.S. Manufacturing Plants ∗

TLDR
The authors examined the role of international trade in the reallocation of U.S. manufacturing within and across industries from 1977 to 1997 and found that plant survival and growth are negatively associated with industry exposure to low-wage country imports.
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This article is published in Journal of International Economics.The article was published on 2003-06-04 and is currently open access. It has received 557 citations till now. The article focuses on the topics: Comparative advantage.

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Journal ArticleDOI

The China Syndrome: Local Labor Market Effects of Import Competition in the United States

TL;DR: This paper analyzed the effect of Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross-market variation in import exposure stemming from initial diffe cerence to US labor markets.
Journal ArticleDOI

Firms in International Trade

TL;DR: The authors make use of transaction-level U.S. trade data to introduce a number of new stylized facts about firms and trade, such as the extensive margins of trade, that is, the number of products firms trade and the countries with which they trade, to understand the role of distance in dampening aggregate trade flows.
Journal ArticleDOI

Firms in international trade

TL;DR: This paper found that exporters are larger, more productive, more skill-and capital-intensive, and to pay higher wages than non-exporting firms, and that the top 10 percent of exporters accounted for 96 percent of total U.S. exports.
Journal ArticleDOI

Across-Product Versus Within-Product Specialization in International Trade

TL;DR: In this paper, the authors exploit product-level U.S. import data to test trade theory and find that unit values within products vary systematically with exporter relative factor endowments and exporter production techniques.
Journal ArticleDOI

Trade Induced Technical Change? The Impact of Chinese Imports on innovation, IT and Productivity

TL;DR: This paper examined the impact of Chinese import competition on broad measures of technical change (patenting, IT, and TFP) using new panel data across twelve European countries from 1996 to 2007 and found that the absolute volume of innovation increases within the firms most affected by Chinese imports in their output markets.
References
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Posted Content

The Dynamics Of Productivity In The Telecommunications Equipment Industry

TL;DR: In this article, the authors developed an estimation algorithm that takes into account the relationship between productivity on the one hand, and both input demand and survival on the other, guided by a dynamic equilibrium model that generates the exit and input demand equations needed to correct for the simultaneity and selection problems.
ReportDOI

The Dynamics of Productivity in the Telecommunications Equipment Industry

G. Steven Olley, +1 more
- 01 Nov 1996 - 
TL;DR: In this paper, an empirical focus is on estimating the parameters of a production function for the equipment industry, and then using those estimates to analyze the evolution of plant-level productivity.
Journal ArticleDOI

Entry, exit, and firm dynamics in long run equilibrium

Hugo A. Hopenhayn
- 01 Sep 1992 - 
TL;DR: In this article, a dynamic stochastic model for a competitive industry is developed in which entry, exit, and the growth of firms' output and employment is determined, and conditions under which there is entry and exit in the long run are developed.
Journal ArticleDOI

Gross Job Creation, Gross Job Destruction, and Employment Reallocation

TL;DR: The authors measured the heterogeneity of establishment-level employment changes in the U.S. manufacturing sector over the 1972 to 1986 period and measured this heterogeneity in terms of the gross creation and destruction of jobs and the rate at which jobs are reallocated across plants.
Posted Content

Gibrat's legacy

TL;DR: In this paper, the authors trace the time series (Growth of Firms) tradition in the study of market structure and look at how recent studies on entry and the size distribution of firms have modified thinking in this area.
Related Papers (5)
Frequently Asked Questions (10)
Q1. Why do the authors use a normalized growth rate in their analysis?

Because their sample of plants includes deaths and births, the authors follow Davis and Haltiwanger (1992) in using a normalized growth rate in their analysis. 

Based on the robustness of the relationship between low-wage import shares and plant performance, the authors conclude against the explanation that their results are driven by reverse causation or omitted variables. 

Import penetration ratios, for example, can induce negative correlation with plant output and employment growth due to the presence of domestic production in the denominator. 

This evidence of reallocation across and within manufacturing industries is consistent with key implications of the Heckscher-Ohlin model of trade, which has low-wage countries forcing the U.S. out of product markets at odds with its comparative advantage. 

One way to reconcile the model with observed plant heterogeneity is to assume plants produce a bundle of products within an industry. 

The weak correlation with changes in real import prices may be due to the sparseness and relatively high level of industry aggregation of the import price indexes. 

As above, inclusion of additional controls does not affect the sign or significance of the V SH coefficient; in all columns, higher levels of low-wage import shares are associated with lower subsequent annual plant employment growth rates. 

This movement into more viable products is consistent with the view that plants escape low wage country competition by upgrading their product mix. 

While there are numerous possible candidate theories to explain relative performance across industries, the authors focus on productivity growth, persistence in employment growth rates, and skill-biased technological change (via relative wages). 

A key contribution of their analysis is the finding that the origin of imports, rather than their overall level, is significantly related to industry and plant reallocation over time.