Import Price Pressure on Firm Productivity and Employment: The Case of US Textiles

Center for Economic Studies, US Bureau of the Census Working Paper No. CES-WP-06-09

61 Pages Posted: 25 Apr 2006  

Patrick J. Conway

University of North Carolina (UNC) at Chapel Hill - Department of Economics

Date Written: March 2006

Abstract

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.

Keywords: import competition, productivity, downsizing, plant closure

JEL Classification: F12, F13, F14

Suggested Citation

Conway, Patrick J., Import Price Pressure on Firm Productivity and Employment: The Case of US Textiles (March 2006). Center for Economic Studies, US Bureau of the Census Working Paper No. CES-WP-06-09. Available at SSRN: https://ssrn.com/abstract=897985 or http://dx.doi.org/10.2139/ssrn.897985

Patrick J. Conway (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Chapel Hill, NC 27599
United States
919-966-2383 (Phone)
919-966-4986 (Fax)

HOME PAGE: http://www.unc.edu/home/pconway

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