Growth Spillovers from China: A Firm-Level Anatomy

Paula Beltran, Lukas Franz and Andrea Presbitero

No 22138, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study how growth shocks in China propagate to foreign firms through trade and supply chain linkages. We build granular instruments from idiosyncratic shocks to Chinese firms and trace their effects on almost 10 million firms in 37 countries. The same Chinese sectoral growth shock raises revenue for some foreign firms and lowers it for others, depending on how they are connected to China. Firms facing Chinese competition grow more slowly, while those exposed through export demand and input linkages benefit. We provide a unified firm-level decomposition into import competition, export demand, and input supply channels, highlighting that import competition captures only part of the spillovers of Chinese growth to foreign firms.

Keywords: China shock; Trade spillovers; Global value chains; Granular instrumental variable (search for similar items in EconPapers)
JEL-codes: F14 F34 F60 L25 (search for similar items in EconPapers)
Date: 2026-11
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