IMPORT COMPETITION AND LABOR PRODUCTIVITY -Evidence from Swedish manufacturing during (original) (raw)

The role of import competition

2021

Does increasing product-market competition from foreign firms affect domestic labor shares? By combining detailed Swedish firm-level data with an instrumental variable design, I show that an increase in import penetration caused by increased global competition results in a decrease in domestic industry-level labor shares. The decrease comes both from a reallocation of firms’ market shares and a fall in labor shares at the firm level. The analysis shows that the negative effect of competition on firm-level labor shares is driven by an increase in productivity that is not met by a corresponding increase in compensation to labor. I use these findings to calibrate a heterogeneous-firm model where domestic and foreign firms compete on the domestic product market. The calibrated model predicts that an increase in foreign competition corresponding to a one standard deviation increase in import penetration results in a 1.12 percentage point increase in welfare.

The Effects of Import Competition on Employment and Wages in the Manufacturing Industry of Turkey

Eurasian Journal of Social Sciences, 2016

This paper investigates the effect of import competition on employment and wages in the 18 sectors of the Turkish manufacturing industry using panel data methodology over the 2003-2011 period. The industry import unit value indexes are used in order to measure import competition for the industries. The estimation results of two stages squares method suggest that changes in import values have a significant effect on employment in the sectors of manufacturing industry. However, this study can not find a significant relationship between import competition and industry wages.

Does rising import competition harm local firm productivity in less advanced economies? Evidence from the Vietnam's manufacturing sector

The Journal of International Trade & Economic Development, 2015

This paper examines whether rising import penetration has an effect on the productivity of domestic firms. The study uses data on a 10-year unbalanced panel of firms in the manufacturing sector in Vietnam from 2000 to 2009. Panel and instrumental variable methods are used to control for firm heterogeneity and endogeneity of import penetration. We find significantly negative effects of import competition on local firms' productivity. Further investigation on the basis of firm size and industry technology levels shows that SMEs are more adversely affected, but that industry technology level does not matter.

Labour Productivity in Australian Manufacturing: The Impact of Import Competition and Market Structure

Monash University eBooks, 2005

Through altering competitive conditions, globalization can have a significant impact on productivity of the domestic economy. We estimate the impact of import competition and domestic market structure on labour productivity growth in Australian manufacturing using a panel data analysis covering a period of nearly three decades. The results show strong evidence that import competition increases labour productivity growth, particularly in industries where domestic production is highly concentrated.

New Lessons from an Old Strategy: Import Substitution, Productivity and Competitiveness

2015

This paper examines the relation between import substitution, labour productivity and industrial competitiveness. More specifically this paper tests if the import substitution enhances both labour productivity and competitiveness in Korean and Turkish manufacturing industries. The data used in the analysis are obtained from UNIDO Industrial Demand Supply (2013) and UNIDO Industrial Statistics (2013) databases and cover the period of 1981-2001. Our results show that Turkish economy has really left import substitution after 1980. However, we found significant share of import substitution in total production in professional and scientific equipment, transportation equipment, electrical machinery, miscellaneous petroleum products, industrial chemicals industries and petroleum refineries in Korea especially in the 1990s. The results based on unbalanced dynamic panel data estimations showed that import substitution did not enhance labour productivity in manufacturing industry of both Korea and Turkey. However, we found that import substitution affects industrial competitiveness positively in both Korea and Turkey. Apart from the positive impact of import substitution on competitiveness , we also found in this study that while Korean manufacturing industry competitiveness is closely associated with labour productivity, competitiveness of Turkish manufacturing industry depends on the factors such as exchange rates, wage differentials rather than labour productivity.

Imports and Productivity

How do imports affect firm productivity? To answer this question, we estimate a structural model of importers using a panel of Hungarian firms. In our model with heterogenous goods, imported inputs improve productivity because (1) they are imperfect substitutes of domestic inputs; and (2) they have higher quality. This model yields a production function where output depends both on conventional factors and the number of product varieties imported. We estimate this import-augmented production function with the Olley and Pakes (1996) procedure, and find that increasing the fraction of product varieties imported from 0 to 100 percent leads to a productivity gain of 14 percent. About two thirds of this gain can be attributed to imperfect substitution, while the remainder is due to the higher quality of imports. We also compute the effects of a hypothetical tariff cut, and find that for small firms, it improves productivity through importing more product varieties, while for large firms it improves productivity through increasing existing imports.

Does Import Competition Lower Number of Labor and Wage ? Evidence from Indonesia ’ s Textile Industry and Apparel Industry

One of the oldest propositions in economics is that import competition brings pressure on employment and wage. Based on this proposition, workers in Indonesia, particularly those of textile industry and apparel industry claim that import competition has reduced the number of labor and wage. This study, using panel data of both industries over the period between 1989 and 1998, is intended to find empirical evidence whether this claim has solid ground. The results confirm the proposition. Yet, the magnitude of the impact is so trivial.

Offshoring and productivity: Evidence using Swedish firm level data

The objective of this paper is to analyze imported intermediate material and services on …rm level productivity. The analysis is based on an administrative dataset on Swedish …rms, 1997-2002. The results show that both material and service o¤shoring increase …rm level productivity. The largest productivity gain of imported intermediate material comes from o¤shoring to Asia and Eastern Europe. Further, …rms that engage in service o¤shoring obtain a higher productivity e¤ect of labor input and …rms that o¤shore material get an additional productivity e¤ect of material input.

International trade and inter-industry wage structure : with reference to matched employer-employee data from Swedish manufacturing sector

2005

The aims of the four treatises contained in here are to investigate the determinants of export (and FDI) and possible impacts of international trade on labour productivity, labour demand and inter-industry wage premiums. Paper [1] uses shift-share method and augmented production function-approach. This research investigates the determinants of the growth of labour productivity in the manufacturing sector. The research is based on a three-digit level set of data for 170 industries from the manufacturing sector of Guangdong province, China, for periods 1995-1997 and 1998-2001. The result of this research suggests that reallocation of work-force across industries play a minor role in the growth of aggregate productivity. It shows that growth of productivity could be attributed to accumulation of physical and human capital. There is evidence to the existence of productivity effect of market oriented reforms. Further, it suggests that overall effects of export and FDI (for the full sampl...