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The Chinese are Here: Firm Level Analysis of Import Competition and Performance in Sub-Saharan Africa

Christian K. Darko, Giovanni Occhiali and Enrico Vanino ()
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Christian K. Darko: University of Birmingham
Giovanni Occhiali: Fondazione Eni Enrico Mattei and Overseas Development Institute

No 2018.14, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This study uses firm level data on 19 Sub-Saharan Africa countries between 2004 and 2016 to provide a rigorous analysis on the impact of Chinese import competition on productivity, skills, and performance of firms., We measure import competition and ports accessibility at the city-industry level to identify the relevance of firms’ location in determining the impact of Chinese imports competition. To address endogeneity concerns, a time-varying instrument for Chinese imports based on the interaction between an exogenous geographic characteristic and a shock in transportation technology is developed. The results show that imports competition has a positive impact on firm performance, mainly in terms of productivity catch-up and skills upgrading. Of particular interest is the finding that the effects of import competition from China are stronger for more remote firms that have lower port accessibility, an indication that Chinese imports in remote areas improves productivity of laggard firms, employment, and intensity of skilled workers. Our findings indicate that African firms are improving their performance as a consequence of the higher Chinese import intensity, mainly through direct competition and the use of higher quality inputs of production sourced from China.

Keywords: Import Competition; Productivity Catch-up; Trade Infrastructure; Skills; Employment; Sub-Saharan Africa; China (search for similar items in EconPapers)
JEL-codes: F16 F61 F63 R11 J21 J24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cna, nep-eff, nep-int and nep-lma
Date: 2018-05
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