Impact of International Competition on Small-Firm Exit in U.S. Manufacturing

摘要

This econometric study uses Statistics of U.S. Businesses (SUSB) data to examine the impact of trade on small manufacturers. As global trade increases and currency exchange rates fluctuate, concerns about their impact on small U.S. manufacturers increase. Small manufacturers, by the nature of their scale of operations, are less able to insulate themselves from foreign competition than large manufacturers. Although not without costs, large manufacturers have greater leeway in managing the effects of international competition: they can move production offshore, sign long-term commodity contracts in foreign currencies, or use other tactics to weather global shifts. Increased international pressures in the form of currency exchange rates lead to increased exit rates among very small manufacturers (those with fewer than 20 employees). Slightly bigger manufacturers (20-499 employees) are less sensitive to changing conditions in the international marketplace. High-tech industries are more insulated from international pressures than low-tech industries are.