Trade with China and Skill Upgrading: Evidence from Belgian Firm Level Data

Giordano Mion, Hylke Vandenbussche () and Linke Zhu

LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, K.U.Leuven

Abstract: We use Belgian ?rm level data over the period 1996-2006 to analyze the impact of imports from China and other low wage countries on ?rm growth, death, and skill upgrading. We distinguish the impact of imports into two di¡èerent channels: industry-level import competition and ?rm-level outsourcing. We ?nd that imports from China are much more important than imports from other low-wage countries. Industry-level import competition from China reduced ?rm employment and induced skill upgrading. Import competition from China alone can explain around 30 percent of the total skill upgrading in Belgian manufacturing during 1996- 2006. Our IV results con?rm the ambiguous role of outsourcing in ?rm employment growth, but we also ?nd that outsourcing to China will increase the relative employment of non-production workers and is bene?cial for ?rm survival.

Keywords: import competition; outsourcing; China; skill upgrading (search for similar items in EconPapers)
JEL-codes: F11 F14 F16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna and nep-int
Date: 2009
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Persistent link: http://EconPapers.repec.org/RePEc:lic:licosd:24809

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