Who Benefits from the Decline of American Manufacturing? Evidence from 142,663 Foreign and Domestic Entries in China

We study the effects of globalization on entrepreneurial activities in China, using a favorable change in U.S. trade policy as a plausibly exogenous shock. We find that domestic entrepreneurs in exposed industries benefit more from the shock in financially-developed areas and areas dominated by large businesses. In undeveloped areas, however, the shock generates new local suppliers in upstream industries. Large and foreign entrants are more...