Import competition, dynamic resource allocation and productivity dispersion: micro-level evidence from China

Sai Ding, Wei Jiang and Puyang Sun ()

Oxford Economic Papers, 2016, vol. 68, issue 4, 994-1015

Abstract: Can trade liberalization shape sector dynamics by inducing reallocation of resources towards more efficient use? This paper explores whether and how import competition affects productivity dispersion within 425 four-digit manufacturing industries in China. Using a number of comprehensive micro-level datasets over the period of 2000–-2006, we find that import penetration reduces the productivity dispersion in general and the main channel is through the competition-induced dynamic resource allocation within industries by driving the least efficient firms out of the market. The trade-induced productivity truncation is more evident for imports under the ordinary trade regime and for final imported goods and intermediate goods imported by the same industries. The results are robust to various model specifications and estimation methods.

JEL-codes: D24 F14 L1 O12 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://hdl.handle.net/10.1093/oep/gpw036 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:68:y:2016:i:4:p:994-1015.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Oxford Economic Papers is currently edited by James Forder and Francis J. Teal

More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().