Chinese Import Competition and Prices: Evidence from India*
利用1996-2007年印度制造业企业产品层面的销售和数量数据，研究发现中国进口竞争导致企业产品价格显著下降，主要源于加价率降低而非成本节约传导，且对集团企业影响较小。
How do output prices respond to trade shocks? Using detailed firm‐product level data on sales and quantity between 1996 and 2007, we study the causal effect of Chinese import competition on prices for Indian manufacturing firms. We find that Chinese import competition induces a significant decline in firm‐product prices. A 1 percentage point increase in the Chinese import penetration ratio reduces firm‐product prices by 3.5%. Further, this decline in prices is driven by a decline in markup, conditional on costs, as opposed to the pass through of cost savings to prices – providing evidence for pro‐competitive effect . This decline in prices and markup is less pronounced for firms owned by Business Groups compared to stand‐alone, privately owned firms. We also document a large decrease in marginal costs and an increase in markup with no significant effect on prices for firms on account of increased access to imported Chinese inputs.