Abstract
This study considers for the first time the role of rising import competition on employment in Vietnam. Using a time differenced and instrumental variables approach, our study shows that import competition results in employment contraction. Firms operating in industries that face greater import competition have reduced employment. We also find strong evidence of a negative impact of import competition for small and very small firms, as well as in the period before Vietnam’s World Trade Organization (WTO) accession. Our results also reveal that previous studies at the industry-level can provide biased estimates because of not controlling for the heterogeneity of firm characteristics.
Highlights
International trade in the early twenty-first century has been characterised by the boom in Chinese exports
This article examined how firm employment is affected by increasing import penetration in the Vietnam manufacturing sector
Based on an unbalanced panel data set spanning 2000–2009, we identify the effect of import penetration on employment growth by examining within-industry and within-firm variation
Summary
International trade in the early twenty-first century has been characterised by the boom in Chinese exports. Studies at the country- or industry-level may not detect the real impacts of imports on employment. The present study is expected to have a number of unique contributions to the literature It draws upon a unique panel data set to provide the first evidence at the firm-level of the impact of import competition on employment in Vietnam. A challenge in empirical studies of the impact of imports on employment relates to biased estimates possibly due to unobserved characteristics and potentially endogenous imports. These are overcome by using a combination of time-differenced and instrumental variable estimations.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
