Emerging Trade Battlefield with China: Export Competition and Firm’s Coping Strategies

Abstract

This paper analyzes how intensified Chinese export competition affects the exports and product ranges of firms from Finland. Using a novel identification strategy that exploits changes in Chinese export policies, we find that Chinese export competition reduces aggregate product-level exports. Firm-level analysis further shows that Chinese competition leads to substantial price cuts to retain market shares, especially for homogeneous products. In addition, we also discover that firms respond to the increased level of Chinese export competition by dropping their marginal products. Taken together, these results highlight the importance of export competition with China for developed countries.

Information om publikationen

Serie
ETLA Working Papers 71
Datum
30.10.2019
Nyckelord
Trade flows, Export competition, Firm-level, Product mix, China
ISSN
2323-2420, 2323-2439 (Pdf)
JEL
F14, F15, F61, L25
Sidor
44
Språk
Engelska