Competing with cheap Chinese imports is actually forcing American companies to be more ethical and run a tighter ship.
SSRN · March 18, 2026 · 6353178
The Takeaway
Conventional wisdom suggests that intense market pressure leads to corner-cutting or toxic work environments. Instead, this paper finds that U.S. firms hit hardest by 'the China shock' responded by doubling down on values like integrity, teamwork, and innovation as a strategic way to survive and stay resilient.
From the abstract
Exploiting the China shock, we find that U.S. firms exposed to increased import competition strengthen their overall culture. This positive relationship is more pronounced in firms where responses through tangible assets are more constrained — those with lower asset redeployability or lower asset tangibility. We also find this relationship is stronger in firms where top executives have a more long-term orientation, as proxied by higher managerial or CEO ownership. Additional analyses show that e