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 re-examined the impact of rising imports from China on intra-firm productivity growth in the EU over the period 2005-2016. In contrast to previous studies, we find that an increasing share of Chinese imports in total imports slowed down productivity growth over the observation period. This was particularly the case after the 2008-09 financial crisis and was more pronounced for firms with lower productivity growth. On average, the net effect of China's increasing import intensity on productivity growth has been negative for EU firms since 2010. At the beginning of the sample, firms with median growth experienced a modest growth-enhancing effect, which turned slightly negative in the last observation year. The effect was muted for high-growth multinationals, which experienced a productivity growth premium from Chinese import competition at higher growth rates. Compared to the USA, the negative impact of Chinese import competition on the performance of EU firms is visible with a time lag.

Keywords: China; Productivity; Multinational Firms; Manufacturing; Import Competition; EU (search for similar items in EconPapers)
Pages: 50 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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Working Paper: The Impact of Import Competition from China on Firm-level Productivity Growth in the EU (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:wfo:wpaper:y:2021:i:623

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