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International competition and firm performance: evidence from Belgium

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  • Jan De Loecker
  • Catherine Fuss
  • Jo Van Biesebroeck

Abstract

We evaluate the impact of international competition on firm-level performance in Belgium. In the manufacturing sector we consider both the impact of global competition through measures of import penetration and the impact of within-EU competitiveness using measures of relative labor cost. In selected manufacturing sectors we identify the strength of international competition through a firm’s proximity to the border. In both instances, we consider the impact on a variety of performance dimensions to learn about the mechanisms and about firms’ adjustment to these competitive pressures.

Suggested Citation

  • Jan De Loecker & Catherine Fuss & Jo Van Biesebroeck, 2014. "International competition and firm performance: evidence from Belgium," Working Papers of Department of Economics, Leuven 553099, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    • Handle: RePEc:ete:ceswps:553099
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    2. Alan Asprilla & Nicolas Berman & Olivier Cadot & Mélise Jaud, 2019. "Trade Policy And Market Power: Firm‐Level Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(4), pages 1647-1673, November.
    3. Meinen, Philipp, 2016. "Markup responses to Chinese imports," Discussion Papers 02/2016, Deutsche Bundesbank.
    4. Emmanuel Dhyne & Ayumu Ken Kikkawa & Magne Mogstad & Felix Tintelnot, 2021. "Trade and Domestic Production Networks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(2), pages 643-668.
    5. Dhyne, Emmanuel & Kikkawa, Ayumu Ken & Kong, Xianglong & Mogstad, Magne & Tintelnot, Felix, 2023. "Endogenous production networks with fixed costs," Journal of International Economics, Elsevier, vol. 145(C).
    6. Emanuele Forlani & Ralf Martin & Giordano Mion & Mirabelle Muûls, 2023. "Unraveling Firms: Demand, Productivity and Markups Heterogeneity," The Economic Journal, Royal Economic Society, vol. 133(654), pages 2251-2302.
    7. Zhi, Yan & Bao, Di & Luo, Changyuan, 2019. "The China effect: Evidence from data at firm level in Thailand," Economic Systems, Elsevier, vol. 43(2), pages 1-1.
    8. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Marijn Verschelde, 2018. "Nonparametric Production Analysis with Unobserved Heterogeneity in Productivity," Working Papers ECARES 2018-25, ULB -- Universite Libre de Bruxelles.
    9. Vallés, Javier & Salas Fumás, Vicente & San Juan, Lucio, 2022. "Corporate economic profits in the euro area: The relevance of cost competitive advantage," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 569-585.
    10. repec:wsr:wpaper:y:2018:i:184 is not listed on IDEAS
    11. repec:nbb:ecrart:y:2014:m:december:i:iii:p:69-82 is not listed on IDEAS
    12. Emmanuel Dhyne & Ayumu Ken Kikkawa & Glenn Magerman, 2022. "Imperfect Competition in Firm-to-Firm Trade," Journal of the European Economic Association, European Economic Association, vol. 20(5), pages 1933-1970.
    13. Emmanuel Dhyne & Catherine Fuss, 2014. "Main lessons of the NBB’s 2014 conference “Total factor productivity : measurement, determinants and effects”," Economic Review, National Bank of Belgium, issue iii, pages 63-76, December.
    14. Gullstrand, Joakim & Knutsson, Polina, 2019. "The Spatial Dimension of Import Competition," Working Papers 2019:13, Lund University, Department of Economics.
    15. Meinen, Philipp, 2016. "Markup responses to Chinese imports," Economics Letters, Elsevier, vol. 141(C), pages 122-124.
    16. J. De Mulder & H. Godefroid, 2018. "Slowdown in productivity," Economic Review, National Bank of Belgium, issue iv, pages 51-66, december.
    17. Jan De Loecker & Catherine Fuss & Johannes Van Biesebroeck, 2018. "Markup and price dynamics:linking micro to macro," Working Paper Research 357, National Bank of Belgium.
    18. HAYAKAWA Kazunobu & URATA Shujiro & YAMANOUCHI Kenta, 2022. "Import Competition from China and Markup Dispersion," Discussion papers 22031, Research Institute of Economy, Trade and Industry (RIETI).
    19. Akgündüz, Yusuf Emre & Torun, Huzeyfe, 2020. "Two and a half million Syrian refugees, tasks and capital intensity," Journal of Development Economics, Elsevier, vol. 145(C).
    20. Kazunobu Hayakawa & Kenta Yamanouchi, 2024. "How does the reform of rules of origin affect firm performance in importing countries?," The World Economy, Wiley Blackwell, vol. 47(2), pages 837-856, February.
    21. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Marijn Verschelde, 2018. "Nonparametric identification of unobserved technological heterogeneity in production," Working Paper Research 335, National Bank of Belgium.
    22. Laurens Cherchye & Bram De Rock & Antonio Estache & Marijn Verschelde, 2015. "Efficiency Measures in Regulated Industries: History, Outstanding Challenges and Emerging Solutions," Working Papers ECARES ECARES 2015-09, ULB -- Universite Libre de Bruxelles.
    23. Colin J. Hottman & Ryan Monarch, 2018. "Estimating Unequal Gains across U.S. Consumers with Supplier Trade Data," International Finance Discussion Papers 1220, Board of Governors of the Federal Reserve System (U.S.).
    24. Van Biesebroeck, Johannes & De loecker, Jan, 2016. "The effect of international competition on firm productivity and market power," CEPR Discussion Papers 11114, C.E.P.R. Discussion Papers.
    25. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Cédric Duprez & Glenn Magerman & Marijn Verschelde, 2021. "Structural Identification of Productivity under Biased Technological Change∗," Working Papers ECARES 2021-28, ULB -- Universite Libre de Bruxelles.

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