FEEM working papers "Note di lavoro"
2018.014
Date: 27/4/2018

The Chinese are Here: Firm Level Analysis of Import Competition and Performance in Sub-Saharan Africa


Authors:
Christian K. Darko (University of Birmingham); Giovanni Occhiali (Fondazione Eni Enrico Mattei, Overseas Development Institute); Enrico Vanino (London School of Economics)
JEL n.: F16, F61, F63, R11, J21, J24
Keywords: Import Competition, Productivity Catch-up, Trade Infrastructure, Skills, Employment, Sub-Saharan Africa, China

Abstract

This study uses firm level data on 19 Sub-Saharan Africa countries between 2004 and 2016 to provide a rigorous analysis on the impact of Chinese import competition on productivity, skills, and performance of firms. We measure import competition and ports accessibility at the city-industry level to identify the relevance of firms’ location in determining the impact of Chinese imports competition. To address endogeneity concerns, a time-varying instrument for Chinese imports based on the interaction between an exogenous geographic characteristic and a shock in transportation technology is developed. The results show that imports competition has a positive impact on firm performance, mainly in terms of productivity catch-up and skills upgrading. Of particular interest is the finding that the effects of import competition from China are stronger for more remote firms that have lower port accessibility, an indication that Chinese imports in remote areas improves productivity of laggard firms, employment, and intensity of skilled workers. Our findings indicate that African firms are improving their performance as a consequence of the higher Chinese import intensity, mainly through direct competition and the use of higher quality inputs of production sourced from China.

***

Suggested citation: Darko, C. K., G. Occhiali, E. Vanino, (2018), 'The Chinese are Here: Firm Level Analysis of Import Competition and Performance in Sub-Saharan Africa', Nota di Lavoro 14.2018, Milano, Italy: Fondazione Eni Enrico Mattei

Download file
Download file

FEEM Newsletter & Update

Subscribe to stay connected.

Your data will be processed by FEEM - Eni Enrico Mattei Foundation - Data Controller - to receive the Foundation's Newsletter & Update via e-mail. To send the requested information, the Data Controller uses e-mail sending service providers established in the U.S.A .: for this, your consent to the transfer of your email address to the U.S.A. is required, without which it will not be possible to comply with your request. We invite you to consult the complete information to obtain detailed information to protect your rights.