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The People’s Republic of China’s Import Competition and Skill Demand in Japanese Manufacturing

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  • Yamashita, Nobuaki

    (Asian Development Bank Institute)

Abstract

We examine the hypothesis that manufacturing industries in Japan that have been exposed to import competition from the People’s Republic of China (PRC) experience greater skill upgrading (increased demand for skilled workers). Using an industry panel dataset over the period 1980–2010, we exploit variations of worker skill categories by occupation, paired with detailed information and communication technology investment data in the employment share regression. We find that while the PRC’s comparative advantages in exports have shifted from labor-intensive to more capital-intensive products, this has not resulted in substituting skilled workers in Japanese manufacturing. Rather, it has had the profound positive effect of raising overall demand for skilled workers. Most of the competition effects were felt among production workers, leaving middle-skilled workers largely unaffected.

Suggested Citation

  • Yamashita, Nobuaki, 2017. "The People’s Republic of China’s Import Competition and Skill Demand in Japanese Manufacturing," ADBI Working Papers 644, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0644
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    References listed on IDEAS

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    Cited by:

    1. Hillberry, Russell & Cheng, Yichuan (Stanley), 2018. "U.S. county-level impacts of growing agricultural imports from China," 2018 Annual Meeting, August 5-7, Washington, D.C. 274283, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    import competition; skill upgrading; skilled workers; manufacturing;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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