IDEAS home Printed from https://ideas.repec.org/a/oup/oxecpp/v68y2016i4p994-1015..html
   My bibliography  Save this article

Import competition, dynamic resource allocation and productivity dispersion: micro-level evidence from China

Author

Listed:
  • Sai Ding
  • Wei Jiang
  • Puyang Sun

Abstract

Can trade liberalization shape sector dynamics by inducing reallocation of resources towards more efficient use? This paper explores whether and how import competition affects productivity dispersion within 425 four-digit manufacturing industries in China. Using a number of comprehensive micro-level datasets over the period of 2000–-2006, we find that import penetration reduces the productivity dispersion in general and the main channel is through the competition-induced dynamic resource allocation within industries by driving the least efficient firms out of the market. The trade-induced productivity truncation is more evident for imports under the ordinary trade regime and for final imported goods and intermediate goods imported by the same industries. The results are robust to various model specifications and estimation methods.

Suggested Citation

  • Sai Ding & Wei Jiang & Puyang Sun, 2016. "Import competition, dynamic resource allocation and productivity dispersion: micro-level evidence from China," Oxford Economic Papers, Oxford University Press, vol. 68(4), pages 994-1015.
    • Handle: RePEc:oup:oxecpp:v:68:y:2016:i:4:p:994-1015.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/oep/gpw036
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Manova, Kalina & Berthou, Antoine & Sandoz, Charlotte & Chung, John Jong-Hyun, 2019. "Trade, Productivity and (Mis)allocation," CEPR Discussion Papers 14203, C.E.P.R. Discussion Papers.
    2. Jiangteng Zhou, 2023. "The impacts of highways on firm size distribution: Evidence from China," Growth and Change, Wiley Blackwell, vol. 54(2), pages 482-506, June.
    3. Kim, Incheol & Lee, Suin & Sharma, Bina, 2023. "Competition law reform and firm performance: Evidence from developing countries," Emerging Markets Review, Elsevier, vol. 56(C).
    4. Chen, Wen & Xue, Wei, 2024. "The impact of capital goods trade liberalization on regional labor market in China," China Economic Review, Elsevier, vol. 86(C).
    5. R. Rijesh, 2021. "Liberalization, Import of Capital Goods, and Industrial Exports: Evidence from Indian Manufacturing Sectors," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 13(1), pages 81-103, January.
    6. R. Rijesh, 2019. "International Trade and Productivity Growth in Indian Industry: Evidence from the Organized Manufacturing Sector," Journal of South Asian Development, , vol. 14(1), pages 1-39, April.
    7. Ernest Kay Bakpa & Hu Xuhua & Abigail Konadu Aboagye, 2021. "Ghana’s economic growth: Directing our focus on the contributing influences of innovation activities and trade," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2213-2237, December.
    8. Gullstrand, Joakim & Knutsson, Polina, 2019. "The Spatial Dimension of Import Competition," Working Papers 2019:13, Lund University, Department of Economics.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:68:y:2016:i:4:p:994-1015.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/oep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.