We investigate the effect of the rise in product market competition, measured by the increase in Chinese exports to Mexico and the US, on the productivity of Mexican plants between 1994 and 2007. We use detailed panel data on Mexican manufacturers matched with trade data at the product level....

This paper analyses the effect of rising competition from Chinese exports on the skill premium of Mexican plants. Using detailed product-plant-level production data from Mexico and bilateral product-level trade data for 1994-2007, we provide evidence that Mexican plants reduce their skill...