More imports, more jobs? Micro evidence from manufacturing firms

Abstract

This paper investigates the impact of imported product variety on firm-level employment, using matched panel data from the China Industrial Enterprise Database and the China Customs Database spanning 2000–2007. Focusing on the extensive margin of imports, we find that increased import variety significantly boosts employment. Mechanism analysis indicates that this effect is mediated through improvements in productivity and expansion in exports. Heterogeneity analysis reveals that the positive impact is more pronounced in capital-intensive sectors and in the Eastern and Western regions, while it is weaker in technology-intensive sectors and statistically insignificant in the Central region. These findings underscore the critical role of import composition in shaping labor market dynamics and provide policy implications for advancing China’s high-level opening-up strategy.