Opposing Firm-Level Responses to the China Shock: Output Competition versus Input Supply

Philippe Aghion (), Antonin Bergeaud, Matthieu Lequien, Marc Melitz and Thomas Zuber ()
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Philippe Aghion: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CdF (institution) - Collège de France
Matthieu Lequien: INSEE - Institut national de la statistique et des études économiques (INSEE)
Marc Melitz: Harvard University
Thomas Zuber: Banque de France - Banque de France - Banque de France

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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 in low-productivity firms. On the other hand, the impact of the input supply shock is reversed.

Date: 2024-05
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Published in American Economic Journal: Economic Policy, 2024, 16 (2), pp.249-269. ⟨10.1257/pol.20210753⟩

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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 (2024)
Working Paper: 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)
Working Paper: Opposing firm-level responses to the China shock: output competition versus input supply (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-04798529

DOI: 10.1257/pol.20210753

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