Effect of wage rise on China's export: empirical research based on industrial panel data

TIE Ying1 ZHANG Mingzhi1

(1.Department of International Economics and Trade, School of Economics, Xiamen University 361005)

【Abstract】Using the 1999–2012 industrial panel data and dividing the industry by different factor intensities, this paper studies how the variation of wage affects China's export. It shows that the wage rise does harm to China's export in general. The wage rise significantly restrains the export of labor-intensive industry, while it assists the export of capital-intensive industry. Against the background of rising wage, the ascent of labor productivity also casts negative influence on export growth which is much more conspicuous in labor-intensive industry. From a dynamic view, the harm of the ascent of wage is slowly weakened as time flows and the effect of ascent of wage on export takes on a “U” shape.

【Keywords】 wages; export trade; industrial panel data;

【DOI】

【Funds】 China’s Ministry of Education, Humanities and Social Sciences general research program: "Study on population structure, labor costs and China Export Competitiveness" (15YJA790083); China’s Ministry of Education, Philosophy and Social Sciences key project: "Research on the long-term trend of foreign trade in the context of rising factor costs" (13JZD010); Special funds of Central Universities fundamental Research Fees (20720151093)

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    Footnote

    [1]. 1 In the appendix to his book "Political and Economic Analysis of China's Foreign Trade Policy” (2002 edition), Sheng Bin provided the comparison table "China Economic Industrial Classification (GB/T4754-2002) and the Standard International Trade Classification (SITC, Rev3)" and the comparison table "International Standard Industrial Classification (ISIC, Rev3) and the Standard International Trade Classification (SITC, Rev3)". [^Back]

    [2]. 2 Since the IMF reported the exchange rate under the indirect quotation, the rise of exchange rate represents increase in value. According to conventional theory, the sign of the regression coefficient for exchange rate should be negative. We shall discuss this issue later in the paper. [^Back]

    [3]. 3 As the testing process is very complicated, here only the final test results are given. If needed, relevant materials can be available from the authors. [^Back]

    [4]. 4 Limited by space, this paper did not report out all relevant cases of all industries. [^Back]

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This Article

ISSN:1002-4670

CN: 11-1692/F

Vol , No. 11, Pages 27-38

November 2015

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Article Outline

Abstract

  • 1 Introduction
  • 2 An empirical analysis of the impact of wage rise on China’s export trade
  • 3 Further discussions on the impact of wage rise on China’s industry export trade
  • 4 Conclusion and implications
  • Footnote

    References