Can Innovation Help U.S. Manufacturing Firms Escape Import Competition from China?

Hombert, Johan; Matray, Adrien

doi:10.1111/jofi.12691

Cited by 204 publications

(30 citation statements)

References 42 publications

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“…However, other studies (e.g., Narkunien_ e & Ulbinait_ e, 2018; Zi zka, Valentov a, Pelloneov a, & Stichhauerov a, 2018) compare the modern methods for performance evaluation of firms and estimate the role of clusters of industry on the innovation performance of firms. Beyond this, Hombert and Matray (2018) consider the linkage between innovation with import activities, and their research indicates that innovation in fact helps U.S. firms escape import competition from China.…”

Section: Literature Reviewmentioning

confidence: 99%

The lasting effects of innovation on firm profitability: panel evidence from a transitional economy

Ngoc

Bui

et al. 2019

Economic Research-Ekonomska Istraživanja

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This study is the first to study the lasting effects of innovation on firm profitability in Vietnam. Using a unique panel dataset for the period 2005-2015, our results show that innovators achieve higher profit in comparison with non-innovating firms. The positive effects of innovation on firm profitability are observed not only in the short term but also in the longer term. The benefits of innovation for firm profitability can be seen in higher export probability, better productivity, better access to formal credit, and the ability to secure government support, but only after innovation.

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Section: Literature Reviewmentioning

confidence: 99%

The lasting effects of innovation on firm profitability: panel evidence from a transitional economy

Ngoc

Bui

et al. 2019

Economic Research-Ekonomska Istraživanja

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show abstract

“…Some of the remaining policy tools available are directed at non-price competitiveness (R&D tax breaks being one example, see e.g. Hombert and Matray 2015). It is however likely that the impact of this type of measures only manifests itself in the long-run.…”

Section: Introductionmentioning

confidence: 99%

Exports and labor costs: evidence from a French policy

Malgouyres¹,

Mayer²

2018

Rev World Econ

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We investigate the role that labor costs hold in exporters' performance. To do so, we exploit a large-scale French reform that granted most firms a tax credit proportional to the wagebill of their employees paid below a given threshold. This policy effectively translated into a cut in labor cost whose magnitude varies depending on firm-specific wage structures. We use the predicted treatment intensity based on pre-reform composition of the labor force as an instrument for the actual policyinduced firm-level change in labor costs. Although our point estimates are consistent with commonly estimated firm-level trade elasticities combined with reasonable labor shares in total costs, coefficients are found to be very noisy, suggesting lack of robust evidence of a causal effect of the policy. We discuss several potential explanations for our results as well as their implications.

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“…The second regression (2) links export intensity with emerging market competition. The literature suggests that internationally active firms are more exposed to emerging market -18competition (Hombert and Matray 2018;Yamashita and Yamauchi 2019;Bloom, Draca, and Van Reenen 2016). We use two variables to measure internationalisation.…”

Section: Regression Analysismentioning

confidence: 99%

“…The other size classes defined are firms with more than 251 and less than 500 employees, between 501 and 1000, and eventually more than 1000 employees. Larger firms are expected to be, on average, more exposed to competition from emerging economies (Bloom, Draca, and Van Reenen 2016;Hombert and Matray 2018).…”

Section: Regression Analysismentioning

confidence: 99%

Do firms facing competitors from emerging markets behave differently? Evidence from Austrian manufacturing firms

Friesenbichler

Reinstaller

2021

EBR

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Purpose The purpose of this study is to explore the strategic positioning and product portfolio diversification of Austrian manufacturing firms that face competition from emerging markets as opposed to firms that do not. Design/methodology/approach The research was conducted in two successive steps. Firstly, a literature review of dynamic capabilities was put into an international and import competition context, from which the domains studied empirically were derived. Secondly, a survey among the largest Austrian manufacturing firms was conducted to explore differences between firms that face competitors from emerging markets, and firms that do not. The questionnaire development was based on the strategic management literature. Even though the data are cross-sectional, backward- and forward-looking questions introduce a dynamic perspective. Both descriptive statistics and a regression analysis were used in the analysis. Findings The findings show that facing competitors from emerging markets is not always a force majeure, but the result of firms’ international activity. An analysis of the competitiveness profile reveals that existing strengths and weaknesses are more pronounced when firms face competitors from emerging markets. In addition, emerging market competition is associated with a broader product portfolio and triggers portfolio adjustments. Yet, a larger share of the companies facing emerging market competitors neither adjusts the product portfolio nor plans to develop new competences. Research limitations/implications One limitation of this study is that it is confined to a survey among Austrian manufacturing firms. The findings may differ in other contexts, and thus, future research should be expanded to include firms from countries that are not from a small, open economy like Austria or from the service sector. The study uses cross-sectional data, and longitudinal/panel data would add causality. Practical implications Emerging markets play an increasing role in international business and there is a fierce debate about the strategic reactions of firms that face such competitors, especially from China. The findings provide guidance to managers who adjust their business strategies in a dynamically evolving competitive environment. The results also provide evidence relevant for strategic industrial policies aiming to reduce pressures from low-cost emerging market competitors while maintaining a free trade regime. Social implications Import competition from China (and other emerging economies) has been argued to contribute to the decline of the manufacturing industry, especially from the USA. The findings provide a building block of the efforts that aim to alleviate competitive pressures. Originality/value Even though researchers increasingly debate the effects of competition from emerging markets, research about incumbents’ responses focuses on broadly defined product diversification or patent analyses. This study aims to fill this gap by providing comprehensive evidence about the strategic positioning of firms, thereby adding to theory. This paper also adds methodologically by offering a comprehensive picture that allows researchers to paint a nuanced picture of firms’ competitiveness.

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Can Innovation Help U.S. Manufacturing Firms Escape Import Competition from China?

Cited by 204 publications

References 42 publications

The lasting effects of innovation on firm profitability: panel evidence from a transitional economy

The lasting effects of innovation on firm profitability: panel evidence from a transitional economy

Exports and labor costs: evidence from a French policy

Do firms facing competitors from emerging markets behave differently? Evidence from Austrian manufacturing firms

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