Trade shocks, new industry entry and industry relatedness

Jiaochen Liang

Regional Studies, 2017, vol. 51, issue 12, 1749-1760

Abstract: Trade shocks, new industry entry and industry relatedness. Regional Studies. This paper examines the relationship between trade shocks and new industry entry at the regional level. Results show that US urban counties experiencing greater Chinese import penetration are more likely to develop new industries. From an evolutionary perspective, these trade shock-induced new industries may bring new growth opportunities to the local economy. It is also found that the positive impacts of trade shocks on industry entry are enhanced by industry relatedness. This suggests trade shock-induced industrial branching is also path dependent and can be influenced by the pre-existing industry structure of a region.

Date: 2017
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DOI: 10.1080/00343404.2016.1245415

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