The Impact of Import Competition on Japanese Manufacturing Employment


Although previous studies of the effect of imports on Japanese employment relied on relatively aggregate data, the variability among industries is substantial within each two-digit sector. This paper exploits recently available longitudinal data of 390 manufacturing industries and controls for industry-specific factors at the four-digit level. This paper finds the significant impact of import price changes on Japanese employment. The estimates suggest that substantial share of average employment decline can be accounted for by the intensified import competition and that the employment sensitivity increases with industry import share. All these findings are significant especially for the yen appreciating recession years.

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