From trade winds to tsunamis: examining the effects of China's WTO integration on Chilean SMEs

Arellano Baeza, Daniela; Babu, Dayitha; Gené, Blanca; SD; Weathersby, Elizabeth

From trade winds to tsunamis: examining the effects of China's WTO integration on Chilean SMEs

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Arellano Baeza, D, Babu, D, Gené, B, SD, Weathersby, E. From trade winds to tsunamis: examining the effects of China's WTO integration on Chilean SMEs. 2023. handle: http://hdl.handle.net/10230/58386

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Abstract

In the 1990s, Chile began to integrate more into the global economy. Likewise, China was becoming a major player in the world trade market. By 2007, China was Chile's main trading partner and Chinese goods accounted for nearly 40% of Chilean imports. This study analyzes the effect of increasing Chinese imports in the 2000s on small manufacturing firms in Chile. We find that for each percentage point increase in Chinese import intensity, small firms lose 0.7% of profits and 0.3 employees on average. Furthermore, we find that this negative impact disproportionately falls on female employees and employees involved in the production process.