This study empirically investigates the effect of import competition on within-firm employment reorganisation using a Japanese firm-level dataset covering the period of 1997–2014. Moreover, this study examines whether the import competition against low-income countries leads to a shift from a manufacturing activity to non-manufacturing activity, such as headquarters’ services, wholesale, retail or R&D. Furthermore, this study explored the heterogeneity of the impacts of import competition according to firm size. Findings reveal that competition from Chinese imports induces manufacturing firms to increase the share of service workers, particularly workers that engage in wholesale, retail and other service activities.
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