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I want to replicate the econometrics analysis from the paper by Autor, Dorn and Hanson (2013): The China Syndrome: Local Labor Market Effects of Import Competition in the United States http://economics.mit.edu/files/7723

Specifically, to identify the causal effect of Chinese imports exposure on US manufacturing employment they employ and an instrumental variable strategy that accounts for the potential endogeneity of US trade exposure. They develop and instrument with which they measure import exposure with a non-US exposure variable, constructed using data on contemporaneous industry level growth of chinese exports to other high income markets (i.e. CHANGE IN IMPORT FROM 8 ADVANCED COUNTRIES).

I need to find another instrumental variable that accounts for the same endogeneity problem (reverse causality). Anyone of you has an idea? What can be another IV? I thought about CHINESE PRODUCTIVITY GDP PER WORKER, or, TARIFFS AND TRADE LIBERALISATION.

Thank you guys

here you can find the data ttps://www.aeaweb.org/articles?id=10.1257/aer.103.6.2121 In the zip file 20111050 data.zip you will and many do files and datasets. The main dataset is workfile_china.dta.

main do file: czone_analysis_ipw_final.do.

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    $\begingroup$ I don't really get your question. You realize that Autor et al. invested years of effort in their paper, including numerous discussions with referees, seminar participants etc. to be convinced that their instrument is valid. Their 'shift-share' instrument has been used multiple times for comparable applications. What is your exact research question and what is the endogeneity problem you are trying to tackle with your alternative instrument? $\endgroup$ – E. Sommer May 10 '18 at 11:36
  • $\begingroup$ Thanks for your precious comment. I need to find another IV for my exam of econometrics, which implies the replication of all the analysis carried out by the authors. That's why my question. I know, obviously, all the efforts made by the authors in finding a good IV. It is just an exercise I must do for my exam. Anyway, I don't need data, I need a suggestion, an example that can possibly fits with the topic. Thanks $\endgroup$ – DALILA RIBAUDO May 10 '18 at 14:18
  • $\begingroup$ The endogeneity problem is reverse causality $\endgroup$ – DALILA RIBAUDO May 10 '18 at 14:19

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