Import Competition and Firms’ Internal Networks

Jay Hyun, Ziho Park and Vladimir Smirnyagin

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Using administrative data on U.S. multisector firms, we document a cross-sectoral propagation of the import competition from China (“China shock”) through firms’ internal networks: Employment of an establishment in a given industry is negatively affected by China shock that hits establishments in other industries within the same firm. This indirect propagation channel impacts both manufacturing and non-manufacturing establishments, and it operates primarily through the establishment exit. We explore a range of explanations for our findings, highlighting the role of within-firm trade across sectors, scope of production, and establishment size. At the sectoral aggregate level, China shock that propagates through firms’ internal networks has a sizable impact on industry-level employment dynamics.

Keywords: China shock; import competition; multisector firms; multiproduct firms; network propagation; trade (search for similar items in EconPapers)
JEL-codes: D22 F14 F40 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2021-09
New Economics Papers: this item is included in nep-bec, nep-cna, nep-com, nep-cse, nep-int, nep-lab, nep-net and nep-ure
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https://www2.census.gov/ces/wp/2021/CES-WP-21-28.pdf First version, 2021 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:21-28

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