Effects of Chinese Import Competition on Self-Employed Business Owners in the US

Exploiting variation in exposure to Chinese import growth across local markets, I investigate the effects of import competition on self-employment in the US. The China trade shock had a sizable negative impact on incorporated self-employed business owners (i.e., entrepreneurs) in manufacturing. The reduction in entrepreneurs also significantly contributed to the decline in total manufacturing employment. The analysis also indicates that other sectors have not absorbed entrepreneurs released from manufacturing. Finally, the effects on entrepreneurship are similar across different demographic groups characterized by gender, age, and education.