The Chinese are Here: Firm Level Analysis of Import Competition and Performance in Sub-Saharan Africa

47 Pages Posted: 25 May 2018

See all articles by Christian Darko

Christian Darko

University of Birmingham - Birmingham Business School

Giovanni Occhiali

Fondazione Eni Enrico Mattei (FEEM)

Enrico Vanino

London School of Economics & Political Science (LSE) - London School of Economics

Date Written: May 18, 2018

Abstract

This study uses firm level data on 19 Sub-Saharan Africa countries between 2004 and 2016 to provide a rigorous analysis on the impact of Chinese import competition on productivity, skills, and performance of firms., We measure import competition and ports accessibility at the city-industry level to identify the relevance of firms’ location in determining the impact of Chinese imports competition. To address endogeneity concerns, a time-varying instrument for Chinese imports based on the interaction between an exogenous geographic characteristic and a shock in transportation technology is developed. The results show that imports competition has a positive impact on firm performance, mainly in terms of productivity catch-up and skills upgrading. Of particular interest is the finding that the effects of import competition from China are stronger for more remote firms that have lower port accessibility, an indication that Chinese imports in remote areas improves productivity of laggard firms, employment, and intensity of skilled workers. Our findings indicate that African firms are improving their performance as a consequence of the higher Chinese import intensity, mainly through direct competition and the use of higher quality inputs of production sourced from China.

Keywords: Import Competition, Productivity Catch-up, Trade Infrastructure, Skills, Employment, Sub-Saharan Africa, China

JEL Classification: F16, F61, F63, R11, J21, J24

Suggested Citation

Darko, Christian and Occhiali, Giovanni and Vanino, Enrico, The Chinese are Here: Firm Level Analysis of Import Competition and Performance in Sub-Saharan Africa (May 18, 2018). FEEM Working Paper No. 14.2018, Available at SSRN: https://ssrn.com/abstract=3180528 or http://dx.doi.org/10.2139/ssrn.3180528

Christian Darko

University of Birmingham - Birmingham Business School ( email )

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

Giovanni Occhiali

Fondazione Eni Enrico Mattei (FEEM) ( email )

C.so Magenta 63
Milano, 20123
Italy

Enrico Vanino (Contact Author)

London School of Economics & Political Science (LSE) - London School of Economics

United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
51
Abstract Views
507
rank
465,128
PlumX Metrics