Survival of the Best Fit: Competition from Low Wage Countries and the (Uneven) Growth of US Manufacturing Plants

Andrew Bernard, J. Jensen () and Peter Schott

No 9170, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the relationship between import competition from low wage countries and the reallocation of US manufacturing from 1977 to 1997. Both employment and output growth are slower for plants that face higher levels of low wage import competition in their industry. As a result, US manufacturing is reallocated over time towards industries that are more capital and skill intensive. Differential growth is driven by a combination of increased plant failure rates and slower growth of surviving plants. Within industries, low wage import competition has the strongest effects on the least capital and skill intensive plants. Surviving plants that switch industries move into more capital and skill intensive sectors when they face low wage competition.

JEL-codes: F11 F14 (search for similar items in EconPapers)
Date: 2002-09
New Economics Papers: this item is included in nep-evo and nep-lab
Note: ITI
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Citations: View citations in EconPapers (16)

Published as Bernard, Andrew, J. Bradford Jensen and Peter K. Schott. 2006. Survival of the Best Fit: Exposure to Low-Wage Countries and the (Uneven) Growth of US Manufacturing Plants. Journal of International Economics 68:219-237

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Working Paper: Survival of the Best Fit: Competition from Low Wage Countries and the (Uneven) Growth of U.S. Manufacturing Plants (2002)
Working Paper: Survival of the Best Fit: Competition from Low Wage Countries and the (Uneven) Growth of US Manufacturing Plants (2002)
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