Opposing Firm-Level Responses to the China Shock: Output Competition versus Input Supply

Philippe Aghion, Antonin Bergeaud, Matthieu Lequien, Marc J. Melitz and Thomas Zuber

American Economic Journal: Economic Policy, 2024, vol. 16, issue 2, 249-69

Abstract: We decompose the "China shock" into two components that induce different adjustments for firms exposed to Chinese exports: an output shock affecting firms selling goods that compete with similar imported Chinese goods, and an input supply shock affecting firms using inputs similar to the imported Chinese goods. Combining French accounting, customs, and patent information at the firm level, we show that the output shock is detrimental to firms' sales, employment, and innovation. Moreover, this negative impact is concentrated in low-productivity firms. On the other hand, the impact of the input supply shock is reversed.

JEL-codes: D22 D24 F14 J23 L25 O31 O34 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: Opposing firm-level responses to the China shock: output competition versus input supply (2024)
Working Paper: Opposing Firm-Level Responses to the China Shock: Output Competition versus Input Supply (2024)
Working Paper: Opposing Firm-Level Responses to the China Shock: Output Competition versus Input Supply (2024)
Working Paper: Opposing firm-level responses to the China shock: Output competition versus input supply (2023)
Working Paper: Opposing Firm Level Responses to the China Shock: Output Competition versus Input Supply (2022)
Working Paper: Opposing firm-level responses to the China shock: output competition versus input supply (2022)
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DOI: 10.1257/pol.20210753

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