DP8544 The arrival of cheap goods: Measuring the impact of Chinese import competition on Nordic prices

Author(s): Raphael Auer, Andreas M Fischer, Andreas Kropf
Publication Date: August 2011
Keyword(s): comparative advantage, globalization, intra-industry trade
JEL(s): F11, F12, F14, F16, F40
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8544

What is the impact of Chinese import competition on Nordic producer prices? In a panel covering 23 (2 digit) NACE manufacturing sectors from 1995 to 2008, instrumental variable estimations predict that when Chinese imports capture a 1% increase in market share, Nordic producer prices decrease by about 2.0%. This China effect entails a drop of 14% in producer prices for the analyzed period.