TY  - RPRT
        AU  - Raff, Horst
AU  - Wagner, Joachim
        TI  - Intra-Industry Adjustment to Import Competition: Theory and Application to the German Clothing Industry
        PY  - 2009/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 4434
        UR  - https://www.iza.org/index.php/publications/dp4434
        AB  - This paper uses an oligopoly model with heterogeneous firms to examine how an industry adjusts to rising import competition. The model predicts that in the short run the least efficient firms in the industry become inactive, surviving firms face a fall in output, mark-ups and profits, and the average productivity of survivors increases. These pro-competitive effects of import penetration on the domestic industry disappear in the long run. The predictions for the short run are confirmed in an empirical study of the German clothing industry.
        KW  - international trade
KW  - firm heterogeneity
KW  - productivity
KW  - clothing industry
        ER  -