Import Price Pressure on Firm Productivity and Employment: The Case of US Textiles
Patrick J. Conway
University of North Carolina (UNC) at Chapel Hill - Department of Economics
Center for Economic Studies, US Bureau of the Census Working Paper No. CES-WP-06-09
Theoretical research has predicted three different effects of increased import competition on plant-level behavior: reduced domestic production and sales, improving average efficiency of plants, and increased exit of marginal firms. I use detailed plant-level information available in the US Census of Manufacturers and the Annual Survey of Manufacturers for the period 1983-2001 to decompose these effects. I derive the relative contribution of technology and import competition to the increase in productivity and the decline in employment in textiles production in the US in recent years. I then simulate the impact of removal of quota protection on the scale of operation of the average plant and the incentive to plant closure.
Number of Pages in PDF File: 61
Keywords: import competition, productivity, downsizing, plant closure
JEL Classification: F12, F13, F14
Date posted: April 25, 2006
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