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

POID Working Papers from Centre for Economic Performance, LSE

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 on low-productivity firms. By contrast, we find a positive effect - although often not significant - of the input supply shock on firms' sales, employment and innovation.

Keywords: Competition shock; patent; firms; import (search for similar items in EconPapers)
Date: 2022-11-30
New Economics Papers: this item is included in nep-bec, nep-cna, nep-com, nep-int and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: 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)
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