Estimating the firm level impact of China Imports

An article in the Economist (Oct 15, 2011) describes attempts to understand the impact of imports from China on US jobs.  One study suggests that regions where manufacturers had a greater impact of Chinese imports showed greater job loss and lower wages.  But another study claims that every 10% increase in imports correlated with 12% increase in R&D and 3.2% increase in patent filing. Thus competition seems to push firms to higher value added activities.   Both thus focus on how to adjust skills to be consistent with these changes.  Should importers be required to anticipate these effects and create appropriate solutions or should that remain the individual’s responsibility? Is there a logic to regulate the pace of shifts in imports to provide sufficient time for communities to adjust? How should theTrade Assistance Act be deployed to maximize its benefit to affected communities?

About aviyer2010

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