Export competition with China and firms' coping strategies
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A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
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Authors
Date
2024-10
Department
Department of Economics
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Language
en
Pages
27
Series
Economica, Volume 91, issue 364, pp. 1454-1481
Abstract
This paper analyses how intensified Chinese competition in export markets affects firms' coping strategies. Using a novel identification approach that exploits changes in China's product-specific export policies across industries, we find that Chinese export competition reduces the aggregate value of product- and destination-specific exports of Finland, primarily by putting a downward pressure on export prices. The firm-level analysis using Finnish administrative data shows that firms undertake larger price cuts for homogeneous products than for differentiated export products. We analyse further export firms' coping strategies on product range margin, and find that firms drop their marginal products as the Chinese export competition intensifies. Our results highlight the increasing importance of competition with China for exporters from developed countries.Description
Publisher Copyright: © 2024 The Author(s). Economica published by John Wiley & Sons Ltd on behalf of London School of Economics and Political Science.
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Citation
Nilsson Hakkala, K & Pan, Y 2024, ' Export competition with China and firms' coping strategies ', Economica, vol. 91, no. 364, pp. 1454-1481 . https://doi.org/10.1111/ecca.12542