Exporting unemployment? Assessing the impact of German import competition on regional manufacturing employment in France

Abstract

This paper assesses the extent to which German import competition has contributed to the observed differential decline in manufacturing employment across French regions. The study employs an exposure research design that exploits differences in regional manufacturing specialisation across French départements combined with an instrumental variable strategy. The analysis does not establish a connection between German import competition and differential changes in regional French manufacturing employment. This result suggests that German import competition has neither driven nor halted the overall decline of French manufacturing employment. It also indicates that the sizeable and long-lasting negative regional employment effects of trade between China and developed countries do not necessarily generalise.