Import Competition And Response

These papers, by a number of leading international-trade theorists, present the first significant theoretical work to be done on a topic of considerable interest, import competition. Nine theoretical papers, on topics ranging from protectionist lobbying to adjustment costs, are synthesized in the editor's Introduction, which also contrasts these contributions with the traditional classroom analysis of import competition. Three major empirical studies close the volume. It will prove indispensable for anyone who wishes to think clearly about import competition and about how economies do—and should—respond to it.

We analyze the impact of rising import competition from China on U.S. innovative activities. Using Compustat data, we find that import competition induces R&D expenditures to be reallocated towards more productive and more profitable firms within each industry. Such reallocation effect has the potential to offset the average drop in firm-level R&D identified in the previous literature. Indeed, our quantitative analysis shows no adverse impact of import competition on aggregate R&D expenditures. Taking the analysis beyond manufacturing, we find that import competition has led to reallocation of researchers towards booming service industries, including business and repairs, personal services, and financial services.

Annotation Kletzer attempts to heighten our understanding of the labor market costs of freer trade. While economy-wide net benefits may ensue from lossening trade policies, such policies do not proclude localized net losses. This book aims to measure some of these losses in the hope that future policy making will address them and the people who bear the burdon.

Many African countries liberalized in the belief that international competition would stimulate efficiency, growth and technological dynamism. The results are mixed, but largely disappointing. This book examines why, looking at technological reactions to liberalization in garments and engineering in Tanzania, Kenya and Zimbabwe, countries with different levels of industrialisation and differing degrees of liberalization. Its findings, aimed at practitioners and researchers, explain why the assumptions underlying liberalisation are often flawed, why capabilities differ, and why they lag behind other regions.

This report builds on 2 types of research on the structure and performance of Canadian manufacturing industries. One line addresses industries of domestic producers who serve the small Canadian market in competition with imports and is concerned with the productive efficiency of these industries but not with their short-run responses to international competition. The other line concerns the short-run sensitivity of responses of the manufacturing industries' prices, output, and employment levels to disturbances, focused on responses to domestic disturbances but not international. Using annual data on many individual industries, the study builds a statistical model of adjustments to changes in international competition such as changes in prices and varieties of importable goods, and in Canadian tariffs and the exchange rate. It tracks the effects of those changes on the selling prices of Canadian producers, quantities of imports and exports, and the key input decisions of employment and capital expenditures. It draws conclusions about these adjustment processes for the typical manufacturing industry but also shows how these adjustments vary among sectors and types of industries.