Abstract for:

Survival of the Best Fit: Exposure to Low-Wage Countries and the (Uneven) Growth of U.S. Manufacturing Plants

Andrew B.  Bernard,  J.  Bradford Jensen,  Peter K.  Schott,  September 2003
Paper No' CEPDP0584: | Full paper (pdf)
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Keywords: Low-Wage Country Import Competition; Heckscher-Ohlin, Manufacturing Plant

JEL Classification: F11; F14 ; L25; L60

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: CEP Discussion Papers
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Abstract:

This paper examines the role of international trade in the reallocation of U.S. manufacturing activity within and across industries from 1977 to 1997. It introduces a new measure of industry exposure to international trade, motivated by the Heckscher-Ohlin model, which focuses on where imports originate rather than their overall level. Results demonstrate that plant survival as well as output and employment growth are negatively associated with the share of industry imports sourced from the world ¿s lowest-wage countries. Within industries, activity is reallocated towards capital- intensive plants. Plants are also more likely to alter their product mix (i.e. switch industries) in response to trade with low-wage countries. Plants altering their product mix switch to industries that are more capital and skill- intensive.