Survival of the Best Fit: Exposure to Low-Wage Countries and the (Uneven) Growth of US Manufacturing Plants

Working Paper
May 2003

Using a new measure of industry exposure to international trade that focuses on where imports originate rather than their overall level, the authors show that plants are less likely to survive-and industry output and employment are less likely to grow-when the share of the industry's imports from the lowest-wage countries is high. In addition, plants are more likely to switch industries in response to trade with low-wage countries. Those that do switch move to industries that are more capital- and skill-intensive.

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J. Bradford Jensen Senior Research Staff

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Policy Brief

Olivier Blanchard (PIIE), Thomas Philippon (Stern School of Business, New York University) and Jean Pisani-Ferry (PIIE)

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