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The Impact of Import Competition from China on Firm-level Productivity Growth in the EU

Klaus Friesenbichler (), Agnes Kügler () and Andreas Reinstaller ()

No 623, WIFO Working Papers from WIFO

Abstract: We revisit the impact of rising imports from China on within-firm labour productivity growth in the EU. We analyse the period 2003-2016 which covers the recent increase in technology-intensive imports from China. We uncover a changing relationship over time. Higher fractions of Chinese imports in aggregate imports exert an adverse effect on productivity growth in in later periods, especially after the financial crisis 2008-09. This mirrors the changing nature of trade with China, reversing the growth-enhancing effect of import-competition. This effect is more pronounced for domestic firms, while multinationals are able to benefit from Chinese imports. Both effects become stronger at higher productivity-growth intensities. The growth-dampening effects particularly strong for firms in low-tech industries and in Southern Europe.

Keywords: Import Competition; Multinational Firms; Productivity; Manufacturing; EU; China (search for similar items in EconPapers)
Pages: 61 pages
Date: 2021-03-23
New Economics Papers: this item is included in nep-bec, nep-cna, nep-eff, nep-int and nep-tid
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