DP12173 Services Input Intensity and US Manufacturing Employment Responses to the China Shock

Author(s):	Omar Bamieh, Matteo Fiorini, Bernard Hoekman, Adam Jakubik
Publication Date:	July 2017
Date Revised:	June 2020
Keyword(s):	China shock, import competition, Manufacturing employment, services input use, servicification
JEL(s):	F16, L8
Programme Areas:	International Trade and Regional Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=12173

We present industry-level evidence that manufacturing sectors that make use of services as inputs more intensively are more robust to shocks from import competition. Specifically, the negative effect of the China shock on US manufacturing employment is lower for industries with high services input intensity (SII). Furthermore, our analysis reveals significant heterogeneity in the impact of different types of services, which points towards a fruitful research agenda on the role of services as a determinant of firm competitiveness.