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

Yale School of Management Working Papers from Yale School of Management

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.

Keywords: Heckscher-Ohlin; International Trade; Import Competition; Manufacturing Employment; Manufacturing Output (search for similar items in EconPapers)
JEL-codes: F11 F14 L25 L60 (search for similar items in EconPapers)
Date: 2002-08-30
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Citations: View citations in EconPapers (17)

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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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Persistent link: https://EconPapers.repec.org/RePEc:ysm:somwrk:ysm299

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