Q2. What is the reason why the study is based on the omitted variables?
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.
Q3. What is the effect of import penetration ratios on plant output and employment?
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.
Q4. What is the evidence of reallocation across and within manufacturing industries?
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.
Q5. What is the way to reconcile the model with observed plant heterogeneity?
One way to reconcile the model with observed plant heterogeneity is to assume plants produce a bundle of products within an industry.
Q6. Why is the correlation weak with real import prices?
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.
Q7. Does inclusion of additional controls affect the sign or significance of the V SH coefficient?
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.
Q8. What is the common explanation for the movement into more viable products?
This movement into more viable products is consistent with the view that plants escape low wage country competition by upgrading their product mix.
Q9. What are the possible theories to explain relative performance?
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).
Q10. What is the key contribution of the analysis?
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.