The Impact of China Shock on Deindustrialisation over time

Authors

  • Nugraheni Dwi Utami Universitas Indonesia, Depok, Indonesia

DOI:

https://doi.org/10.47312/aefr.v4i2.657

Abstract

Abstract

 

This paper analyses the impact of Chinese import competition on deindustrialization measured by real value added and employment share in 61 developed and developing countries over 1970-2010 period. By employing quantile regression with instrumental variables to correct potential endogeneity bias, the results suggest that the main driver of deindustrialization in employment in developed countries is technological change. There is heterogeneous effect of China shock. In developed countries, the effect is destructive in term of both employment and real value added in the lower quantile of distribution, with the higher magnitude for the former. In the higher quantile, complementary effect outweighs detrimental impact. In developing countries, the negative effect of China’s shock on real value-added rises as the increase in the proportion of manufacturing value-added in countries. The destructive effect on employment in developing countries seems to be harder after 1990 period.

Keywords : China; competition; deindustrialization

Downloads

Download data is not yet available.

Downloads

Published

2020-05-12

Issue

Vol. 4 No. 2 (2019): December

Section

Articles

License

Authors who publish with this journal agree to the following terms:

Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.

Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.

Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).