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TOPIC:
IMPACT OF CHINA ON KOREA’S MANUFACTURING PLANTS: THE ROLE OF INTERMEDIATE GOODS TRADE
ABSTRACT
It has been argued by many economists that exposure to low-wage countries negatively affects manufacturing plants in high-income countries (e.g., Bernard, Jensen, and Schott, 2006; Autor, Dorn, Hanson, 2013). However, this paper shows evidence to the contrary by analyzing the impact of increased Chinse import penetration on South Korea’s economy. Using plant-level data during 1995-2013, which contain information on the number of employees, value-added, gross output, capital stock, and wages, this paper empirically examines the effects of import competition from China on the growth of productivity and employment of manufacturing plants in Korea.