Volume 7, Issue 2, April 2018, Page: 25-30
Impact of Labor Mobility on Comparative Advantage of Manufacturing Industries in China: Empirical Analysis
Shuang Zhao, School of Business, Nanjing Normal University, Nanjing, China
Received: Mar. 7, 2018;       Accepted: Mar. 28, 2018;       Published: Apr. 28, 2018
DOI: 10.11648/j.ijber.20180702.11      View  1607      Downloads  149
This paper studies the impact of labor mobility on comparative advantage of China’s manufacturing industries. Labor mobility refers to labor movement across regions and industries. Comparative advantage refers to better product performance in international trade in aspect of quality and price, and it can be reflected directly in export values. Industries with comparative advantage have more benefits in international trade. Firstly, this paper reviews literatures that focus on impact of labor market on comparative advantage. Secondly, this paper illustrates the mechanism of how labor mobility has impact on comparative advantage. Thirdly, the empirical analysis tests this mechanism through mixed OLS (Ordinary Least Square) regression and one-way FEM (Fixed Effects Model), using panel data of China subdivision export. The results of empirical analysis support the mechanism. Lastly, this paper reaches a conclusion that higher labor mobility has positive impact on comparative advantage in highly volatile industries, due to the fact those industries in higher labor mobility regions have stronger ability and lower cost to adjust production scale when confronted with economic shocks.
Labor Mobility, Comparative Advantage, Industry Volatility
To cite this article
Shuang Zhao, Impact of Labor Mobility on Comparative Advantage of Manufacturing Industries in China: Empirical Analysis, International Journal of Business and Economics Research. Vol. 7, No. 2, 2018, pp. 25-30. doi: 10.11648/j.ijber.20180702.11
Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Leamer E. Effort, Wages, and the International Division of Labor [J]. Journal of Political Economy, 1996, 107 (6), pp. 1127-1162.
Zhiming Zhang, Riming Cui, Peng Dai. Open Trade, "Labor Contract Law" Implementation and Employment behavior of China's Manufacturing Industry from the Perspective of Value-added Trade [J] International Trade issues, 2017. 04, pp. 153-165.
Cuñat A, Melitz M J. Volatility, Labor Market Flexibility, and the Pattern of Comparative Advantage [J]. Journal of the European Economic Association, 2012, 10 (2), pp. 225–254.
Saint-Paul, G. (1997): Is Labor Rigidity Harming Europe’s Competitiveness? The Effect of Job Protection on the Pattern of Trade and Welfare, European Economic Review, 41, pp. 499-506.
Belloc M. Do Labor Market Institutions Affect International Comparative Advantage? An Empirical Investigation [J]. Department of Economics University of Siena, 2004.
Helpman E. Labor Market Rigidities, Trade and Unemployment [J]. CEPR Discussion Papers, 2007, 77 (3):1100-1137.
Helpman E. Labor Market Frictions as a Source of Comparative Advantage, with Implications for Unemployment and Inequality [J]. CEPR Discussion Papers, 2010.
Dan Sheng, Kunwang Li, Yongjin Wang. Will Labor Mobility affect China's Regional Export Comparative advantage? An Empirical Study Based on the Industrial Segmentation Data of Provinces [J] World Economic Research, 2010, pp. 38-44 + 88.
Wooton, I., & Haaland, J. I. (2007). Domestic labor market and foreign direct investment. Review of International Economics, 15 (3), 462-480.
Redding, Stephen J., 2016. "Goods trade, factor mobility and welfare," Journal of International Economics, Elsevier, vol. 101 (C), pages 148-167.
Sebastian Galiani & Gustavo Torrens, 2015. "The Political Economy of Trade and Labor Mobility in a Ricardian World," NBER Working Papers 21274, National Bureau of Economic Research, Inc.
Ahsan, Rashad N. & Chatterjee, Arpita, 2017. "Trade liberalization and intergenerational occupational mobility in urban India," Journal of International Economics, Elsevier, vol. 109 (C), pages 138-152.
Almeida, Rita K. & Poole, Jennifer P., 2017. "Trade and labor reallocation with heterogeneous enforcement of labor regulations," Journal of Development Economics, Elsevier, vol. 126 (C), pages 154-166.
Gruen Adam & Humus, David & Olsen, Morten, 2015. "Trade Dynamics with Sector-specific Human Capital,"Journal of International Economics, Elsevier, vol. 97 (1), pages 126-147.
David H. Autor & David Dorn & Gordon H. Hanson, 2016. "The China Shock: Learning from LaSbor-Market Adjustment to Large Changes in Trade," Annual Review of Economics, Annual Reviews, vol. 8 (1), pages 205-240, October.
Corbett J. Ernest George Ravenstein, The Laws of Migration, 1885. [J]. CSISS Classics, 2003.
David Ricardo, the Works of David Ricardo, Vol. 1, On the Principles of Political Economy and Taxation, 2013 [M] The Commercial Press.
Nunn N, Trefler Domestic Institutions as a Source of Comparative Advantage [M]// Handbook of International Economics. Elsevier B. V. 2014:263-315.
Browse journals by subject