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- Title
Chinese import competition, offshoring and servitization.
- Authors
Gu, Grace; Malik, Samreen; Pozzoli, Dario; Rocha, Vera
- Abstract
We study how domestic firms adapt to increased import competition from China. Using a Danish employer‐employee matched dataset covering firms over the 1995–2007 period, we find that import competition significantly increases manufacturing firms' expansion of their business activities in the service industry (partial servitization); their probability of offshoring production activities abroad and of exiting the market. Import competition, however, does not induce firms to cease all of their involvement in manufacturing production by completely switching into service sector (complete servitization). These findings are confirmed using various robustness tests as well as an analogous analysis of a Portuguese employer‐employee matched dataset.
- Subjects
CHINA; OFFSHORE outsourcing; BUSINESS process outsourcing; SERVICE industries; IMPORTS; MARKET exit
- Publication
Economic Inquiry, 2022, Vol 60, Issue 2, p901
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/ecin.13055