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Jun
8
IRES Lunch Seminar - Daniele Verdini, IRES/LIDAM, UCLouvain
By IRES Lunch Seminar

Daniele Verdini

IRES/LIDAM, UCLouvain

will give a presentation on

China shock, Markups, and the Evolution of Aggregate Productivity

Abstract:

In this paper, we study the Belgian manufacturing sector's allocative efficiency gains spurred by the surge of import competition from China. By following the identification strategy proposed in Acemoglu et al. (2016), we provide a causal analysis of the impact of rising trade exposure on sector-level TFP and markups evolution. Markups are estimated using the production-side methodology developed by De Loecker & Warzynski (2012). We show that China import competition increases both the average productivity and markup levels, it has a weak impact on market concentration and it does skew the within-sector markup distribution. Our analysis contributes to the debate about the role played by international trade in generating output market misallocation in the economy.