An Impact of Chinese Import Competition on the local labour markets of the European Union

This thesis measures the effects of increased Chinese import competition on the regional manufacturing employment of developed EU economy exploiting cross-market variation in imports exposure originating from initial differences in industry specialization of 276 regions of European Union during the examined period 2000-2014. An instrumental variable strategy enables to instrument Chinese imports in European Union by imports of China in other high income country, United States. The main 2SLS estimates predict that increased Chinese import exposure has surprisingly positive impact on the share of manufacturing employment per working age population. On the other hand, OLS regression estimates indicate that increase of import exposure from China is predicted to reduce the regional manufacturing employment in European Union.