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Chinese Penetration and Importer Country Wages: Microevidence From Chile

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Roberto Álvarez
Luis Opazo

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Abstract

The increasing importance of China in the world trade raises important questions on its impact on importing countries. This paper studies how import competition from China has affected wages in the Chilean Manufacturing Industry. Using plant-level data for the period 1996-2005, we find that increasing imports from China have tended to depress real wages in manufacturing plants. This negative effect on manufacturing workers is heterogeneous. We find that firms in labor-intensive industries and smaller firms have been quantitatively more affected by Chinese competition. These results hold to correction for sample selection and alternative measures of import competition from low-wages countries.

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Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 473.

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Date of creation: Jun 2008
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Handle: RePEc:chb:bcchwp:473

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  1. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February. [Downloadable!] (restricted)
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  2. Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S20-43, July. [Downloadable!] (restricted)
  3. Peter K. Schott, 2003. "One Size Fits All? Heckscher-Ohlin Specialization in Global Production," American Economic Review, American Economic Association, vol. 93(3), pages 686-708, June. [Downloadable!]
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  4. Jonathan E. Haskel & Matthew J. Slaughter, 2003. "Have Falling Tariffs and Transportation Costs Raised US Wage Inequality?," Review of International Economics, Blackwell Publishing, vol. 11(4), pages 630-650, 09. [Downloadable!] (restricted)
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  5. Freeman, Richard B, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer. [Downloadable!] (restricted)
  6. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2005. "What You Export Matters," NBER Working Papers 11905, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Bernard, Andrew B. & Jensen, J. Bradford & Schott, Peter K., 2006. "Survival of the best fit: Exposure to low-wage countries and the (uneven) growth of U.S. manufacturing plants," Journal of International Economics, Elsevier, vol. 68(1), pages 219-237, January. [Downloadable!] (restricted)
    Other versions:
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