Does Import Competition Force Efficient Production?

James MacDonald

The Review of Economics and Statistics, 1994, vol. 76, issue 4, 721-27

Abstract: Increases in import competition led to large increases in labor productivity growth in highly concentrated industries during the period from 1975 through 1987. The finding is based on a panel of ninety-four manufacturing industries observed over four periods, each of three years duration. Imports had no observable effects on productivity growth in less concentrated industries; the strong effects in concentrated industries did not occur contemporaneously but appeared with a one-period lag. The effects are weakened but still statistically significant when Bureau of Labor Statistics productivity data are replaced by National Bureau of Economic Research data and in a larger panel with less precise trade data. Copyright 1994 by MIT Press.

Date: 1994
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