China shock on Japanese firms: Firms’ differential reactions to the increase in Chinese imports

Tadashi Ito and Toshiyuki Matsuura

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This study investigates the impact of import competition from China, using the firm/establishment level data from the Census of Manufacturer with a particular focus on firms’ choice of multiple reactions. We find that product switching is an important reaction for firms facing increasingly harsh competition with imports from China. Firms tend to choose, first, employment adjustment only, and then with stronger import competition, product switching only, and finally, both of employment adjustment and product switching as import competition from China increases.

Pages: 23 pages
Date: 2022-04
New Economics Papers: this item is included in nep-cna, nep-com and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:22036

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