Arbeitspapier
Made in China: Export competition and structural changes in the OECD countries
This paper assesses the existence and extent of transition cost for the OECD economies associated with the increasing Chinese competition in the export markets. We find that intensified Chinese competition is an important factor in explaining structural changes not only within the manufacturing sector but also of the economies as a whole. In our empirical analysis which is guided by a simple extension of the Melitz Model we employ panel data at multiple levels of aggregation. The data reveal considerable adverse effects on export volume and industry-specific output in OECD countries as a result of increased Chinese competition. These distortions originating from the export market also affect structural variables within the manufacturing industries. Even at a regional level, changes in socioeconomic indicators can be associated with intensified Chinese export competition. Within the framework of our theoretical model, the mechanisms behind these observations are the following: The increased Chinese competition leads to a decline in exports and overall output, implying a decrease in average productivity and wages. This induces the reallocation of labor to the low-wage service sector, which in turn results in a reduction of average household income.
- Language
-
Englisch
- Bibliographic citation
-
Series: WWZ Discussion Paper ; No. 2012/09
- Classification
-
Wirtschaft
Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Empirical Studies of Trade
Trade and Labor Market Interactions
- Subject
-
China
Export Competition
Deindustrialization
Internationale Wirtschaft
China
Internationaler Wettbewerb
Handelseffekt
Strukturwandel
Deindustrialisierung
OECD-Staaten
- Event
-
Geistige Schöpfung
- (who)
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Flückiger, Matthias
Ludwig, Markus
- Event
-
Veröffentlichung
- (who)
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University of Basel, Center of Business and Economics (WWZ)
- (where)
-
Basel
- (when)
-
2012
- DOI
-
doi:10.5451/unibas-ep61212
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Flückiger, Matthias
- Ludwig, Markus
- University of Basel, Center of Business and Economics (WWZ)
Time of origin
- 2012
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