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Import liberalization as export destruction? Evidence from the United States
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Breinlich, Holger, Leromain, Elsa, Novy, Dennis and Sampson, Thomas (2022) Import liberalization as export destruction? Evidence from the United States. Working Paper. Coventry, UK: University of Warwick. Department of Economics. Warwick economics research papers series (WERPS) (1413). (Unpublished)
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Official URL: https://warwick.ac.uk/fac/soc/economics/research/w...
Abstract
How does import protection affect export performance? In trade models with scale economies, import liberalization can reduce industry-level exports by cutting domestic production. We show that this export destruction mechanism reduced US export growth following the permanent normalization of trade relations with China (PNTR). But there was also an offsetting boost to exports from lower input costs. We use our empirical results to calibrate the strength of scale economies in a quantitative trade model. Counterfactual analysis implies that while PNTR increased aggregate US exports relative to GDP, exports declined in the most exposed industries because of the export destruction effect. On aggregate, the US and China both gain from PNTR, but the gains are larger for China.
| Item Type: | Working or Discussion Paper (Working Paper) | ||||||||||||
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| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce |
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| Divisions: | Faculty of Social Sciences > Economics | ||||||||||||
| Library of Congress Subject Headings (LCSH): | Commercial policy, Comparative advantage (International trade), Economies of scale, International economic integration | ||||||||||||
| Series Name: | Warwick economics research papers series (WERPS) | ||||||||||||
| Publisher: | University of Warwick. Department of Economics | ||||||||||||
| Place of Publication: | Coventry, UK | ||||||||||||
| ISSN: | 0083-7350 | ||||||||||||
| Official Date: | June 2022 | ||||||||||||
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| Number: | 1413 | ||||||||||||
| Institution: | University of Warwick | ||||||||||||
| Status: | Not Peer Reviewed | ||||||||||||
| Publication Status: | Unpublished | ||||||||||||
| Access rights to Published version: | Open Access (Creative Commons) | ||||||||||||
| Description: | This paper also appears as CRETA Discussion paper number 622. |
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| RIOXX Funder/Project Grant: |
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