M. Alguacil, Alessia Lo Turco, I. Martínez‐Zarzoso
We estimate the effect of the introduction of robots on the intensive and extensive margins of exports using a sample of Spanish manufacturing firms over the period 1994-2014. The empirical strategy used to identify the causal impact of robot adoption on the firm level export performance consists on combining propensity score matching (PSM) and difference in differences (DID) techniques. The results show that firms that start to use robots experience a sharp increase in their export probability, export sales and share of exports in total output and this result is robust to a wide array of checks. Robot adoption not only helps firms to start exporting and moves their specialisation towards intermediate products, but also favours export survival and export sales of exporting firms. The main results are driven by firms active in non-comparative advantage industries facing higher export sunk costs and market penetration costs and by those specialised in the production of intermediates, which can explain the increasing participation of Spain in global value chains. Inspection of the transmission channels suggests that the positive impact of robot adoption on exports could be driven by its positive effect on firm TFP and import probability.
{"title":"What Is so Special about Robots and Trade?","authors":"M. Alguacil, Alessia Lo Turco, I. Martínez‐Zarzoso","doi":"10.2139/ssrn.3756787","DOIUrl":"https://doi.org/10.2139/ssrn.3756787","url":null,"abstract":"We estimate the effect of the introduction of robots on the intensive and extensive margins of exports using a sample of Spanish manufacturing firms over the period 1994-2014. The empirical strategy used to identify the causal impact of robot adoption on the firm level export performance consists on combining propensity score matching (PSM) and difference in differences (DID) techniques. The results show that firms that start to use robots experience a sharp increase in their export probability, export sales and share of exports in total output and this result is robust to a wide array of checks. Robot adoption not only helps firms to start exporting and moves their specialisation towards intermediate products, but also favours export survival and export sales of exporting firms. The main results are driven by firms active in non-comparative advantage industries facing higher export sunk costs and market penetration costs and by those specialised in the production of intermediates, which can explain the increasing participation of Spain in global value chains. Inspection of the transmission channels suggests that the positive impact of robot adoption on exports could be driven by its positive effect on firm TFP and import probability.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"52 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80927341","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Trade openness leads to aggregate welfare gains, but the local effects of trade vary across space. This paper shows that the welfare gains from trade are lower in smaller cities, due to weaker export-specific agglomeration. Using rich micro data from France, I show that firms’ export-to-sales ratio increases with city size, both within and across industries. I develop an open economy economic geography model with heterogeneous firms to rationalize these novel facts: firms jointly choose their location and export behavior in the presence of sectoral differences in factor intensity and external economies of scale in export costs. Within industries, more productive firms sort into larger cities and into exporting, endogenously benefitting from lower export costs. Across industries, more capital-intensive sectors are endogenously more export intensive and overrepresented in larger cities. To quantify the role of export-specific agglomeration forces, I structurally estimate the model: they can account for 1/3 of the differences in export intensity across locations. As a result, counterfactual trade liberalization induces 17% lower welfare gains in bottom size- compared to top size-quartile locations. These results shed new light on the distributional effects of trade openness and help explain the urban-rural divide over protectionist policies.
{"title":"Trade and Agglomeration: Theory and Evidence from France","authors":"J. Bakker","doi":"10.2139/ssrn.3757053","DOIUrl":"https://doi.org/10.2139/ssrn.3757053","url":null,"abstract":"Trade openness leads to aggregate welfare gains, but the local effects of trade vary across space. This paper shows that the welfare gains from trade are lower in smaller cities, due to weaker export-specific agglomeration. Using rich micro data from France, I show that firms’ export-to-sales ratio increases with city size, both within and across industries. I develop an open economy economic geography model with heterogeneous firms to rationalize these novel facts: firms jointly choose their location and export behavior in the presence of sectoral differences in factor intensity and external economies of scale in export costs. Within industries, more productive firms sort into larger cities and into exporting, endogenously benefitting from lower export costs. Across industries, more capital-intensive sectors are endogenously more export intensive and overrepresented in larger cities. To quantify the role of export-specific agglomeration forces, I structurally estimate the model: they can account for 1/3 of the differences in export intensity across locations. As a result, counterfactual trade liberalization induces 17% lower welfare gains in bottom size- compared to top size-quartile locations. These results shed new light on the distributional effects of trade openness and help explain the urban-rural divide over protectionist policies.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"134 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87036937","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyses the roles of the United States International Trade Commission in the United States International Trade System.
本文分析了美国国际贸易委员会在美国国际贸易体系中的作用。
{"title":"The Role of the United States International Trade Commission in the United States International Trade System","authors":"Busola Omosalewa Akinyera","doi":"10.2139/ssrn.3755754","DOIUrl":"https://doi.org/10.2139/ssrn.3755754","url":null,"abstract":"This paper analyses the roles of the United States International Trade Commission in the United States International Trade System.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"39 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91009250","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The world is moving in the direction of the deglobalization era and industrialized countries have already marked its beginning. With this objective, the contemporary research aims to identify the interplay among the select factors that are accountable for changing the paradigm in the United States. Though, a lot of studies have been done concerning globalisation, only a few works have been conducted to analyse the reasons behind the rising displeasure after the global integration. This work attempts to fill the above gap by studying the interaction among the factors leading to deglobalisation process in the United States. Modified total interpretive structural modelling has been used to study the relationship among the factors that have led to decommodification in the United States. Incorporating polarity in TISM modelling will refine the model and make it more explanatory. The developed model is a novel attempt in studying the factors that have led to decommodification in the United States.
{"title":"Incorporation of Polarity in Relationship for Factors Leading to Deglobalisation in the United States","authors":"Shamita Garg, Sushil","doi":"10.2139/ssrn.3753550","DOIUrl":"https://doi.org/10.2139/ssrn.3753550","url":null,"abstract":"The world is moving in the direction of the deglobalization era and industrialized countries have already marked its beginning. With this objective, the contemporary research aims to identify the interplay among the select factors that are accountable for changing the paradigm in the United States. Though, a lot of studies have been done concerning globalisation, only a few works have been conducted to analyse the reasons behind the rising displeasure after the global integration. This work attempts to fill the above gap by studying the interaction among the factors leading to deglobalisation process in the United States. Modified total interpretive structural modelling has been used to study the relationship among the factors that have led to decommodification in the United States. Incorporating polarity in TISM modelling will refine the model and make it more explanatory. The developed model is a novel attempt in studying the factors that have led to decommodification in the United States.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"32 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89977660","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The performance of the Chinese economy has been remarkable since the country began reforming and liberalizing its economy in the late 1970s. The Chinese experience can provide critical social and economic development lessons to other developing countries that are still suffering from high rates of poverty. In 1980, the Chinese economy was ranked among the 15th top economies in the world; it advanced to 4th place in 2001 before advancing further to be the second-largest economy in the world after the United States in 2009. From 1980 to 2009, the Chinese economy has grown by an annual average rate equal to 10% compared to only 2.8% in the US. In the last decade (from 2010 to 2019), the Chinese GDP growth rates increased by an average annual rate equal to 7.7% compared to 2.3% annual rate in the US. As a result of this amazing growth record, the Chinese economy has grown by 34 folds in the last four decades, from 340 billion USD in 1980 to 11.5 trillion USD in 2019. In the same period, the US economy has increased by less than three folds, from 6.5 trillion USD in 1980 to 18.3 trillion USD in 2019. If both countries would continue to grow at the same rates of the last decade, the GDP of both economies will match each other (22.5 trillion USD) in 2028.
China could not have achieved this remarkable economic performance without liberalizing its trading regime with the rest of the world, specifically the largest economy in the world, the United States. China's total trade with the rest of the world increased from 65 billion USD in the mid-1980s to more than 4.5 trillion USD in 2019. With the US, China total trade increased from 7 billion USD in the mid-1980s to around 542 billion USD in 2019. In 2019 and despite the trading war between China and the US, China was the largest trading partner to the US in 2019, the third-largest destination for its exports, and its largest source of imports. On the other hand, the US is the largest export market for China, its sixth major import source, and its largest merchandise trading partner. Despite the tense trade relationship, the two countries face critical political and economic issues including South China Sea, North Korea, climate change, and economic imbalances.
On March 22, 2018, the two countries started a trade war with each other when the Trump administration imposed tariffs on China as a response to what the US claims are the Chinese theft of its intellectual property. The combined GDP of the two countries accounted for more than 35% of the world's total GDP in 2019. Therefore, the ongoing trade war will hurt not only both economies but also the rest of the world. Monitoring the trade relationship between the two countries is important for policymakers and researchers alike. The raw trade data contains critical trends that we could not observe. That is why we need to measure a number of trade indices that are grouped into five main categories as follows:
{"title":"The US and China International Trade Indices: A Comprehensive Empirical Survey, 2020 Edition","authors":"M. A. Abou Hamia","doi":"10.2139/ssrn.3797353","DOIUrl":"https://doi.org/10.2139/ssrn.3797353","url":null,"abstract":"The performance of the Chinese economy has been remarkable since the country began reforming and liberalizing its economy in the late 1970s. The Chinese experience can provide critical social and economic development lessons to other developing countries that are still suffering from high rates of poverty. In 1980, the Chinese economy was ranked among the 15th top economies in the world; it advanced to 4th place in 2001 before advancing further to be the second-largest economy in the world after the United States in 2009. From 1980 to 2009, the Chinese economy has grown by an annual average rate equal to 10% compared to only 2.8% in the US. In the last decade (from 2010 to 2019), the Chinese GDP growth rates increased by an average annual rate equal to 7.7% compared to 2.3% annual rate in the US. As a result of this amazing growth record, the Chinese economy has grown by 34 folds in the last four decades, from 340 billion USD in 1980 to 11.5 trillion USD in 2019. In the same period, the US economy has increased by less than three folds, from 6.5 trillion USD in 1980 to 18.3 trillion USD in 2019. If both countries would continue to grow at the same rates of the last decade, the GDP of both economies will match each other (22.5 trillion USD) in 2028.<br><br>China could not have achieved this remarkable economic performance without liberalizing its trading regime with the rest of the world, specifically the largest economy in the world, the United States. China's total trade with the rest of the world increased from 65 billion USD in the mid-1980s to more than 4.5 trillion USD in 2019. With the US, China total trade increased from 7 billion USD in the mid-1980s to around 542 billion USD in 2019. In 2019 and despite the trading war between China and the US, China was the largest trading partner to the US in 2019, the third-largest destination for its exports, and its largest source of imports. On the other hand, the US is the largest export market for China, its sixth major import source, and its largest merchandise trading partner. Despite the tense trade relationship, the two countries face critical political and economic issues including South China Sea, North Korea, climate change, and economic imbalances. <br><br>On March 22, 2018, the two countries started a trade war with each other when the Trump administration imposed tariffs on China as a response to what the US claims are the Chinese theft of its intellectual property. The combined GDP of the two countries accounted for more than 35% of the world's total GDP in 2019. Therefore, the ongoing trade war will hurt not only both economies but also the rest of the world. Monitoring the trade relationship between the two countries is important for policymakers and researchers alike. The raw trade data contains critical trends that we could not observe. That is why we need to measure a number of trade indices that are grouped into five main categories as follows:<br><br>1. Trade and Economy and inc","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"171 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77482964","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies the impacts of the 2018 U.S. tariff surges on export prices and adjustments of sales across different markets of Chinese exporters. The finding that U.S. tariffs did not affect the free-on-board price of Chinese exports is robust to controlling for firm-related fixed effects. While firms' exports to the U.S. dropped significantly, exports to the E.U. increased moderately and domestic sales or exports to other foreign markets were barely affected. Finally, by surveying managers of exporting firms, we shed light on potential impediments to firms' adjustments of export prices and sales.
{"title":"The Impacts of the U.S. Trade War on Chinese Exporters","authors":"Yang Jiao, Zhikuo Liu, Zhiwei Tian, Xiaxin Wang","doi":"10.2139/ssrn.3745459","DOIUrl":"https://doi.org/10.2139/ssrn.3745459","url":null,"abstract":"\u0000 This paper studies the impacts of the 2018 U.S. tariff surges on export prices and adjustments of sales across different markets of Chinese exporters. The finding that U.S. tariffs did not affect the free-on-board price of Chinese exports is robust to controlling for firm-related fixed effects. While firms' exports to the U.S. dropped significantly, exports to the E.U. increased moderately and domestic sales or exports to other foreign markets were barely affected. Finally, by surveying managers of exporting firms, we shed light on potential impediments to firms' adjustments of export prices and sales.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"43 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81568692","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the impact of the boycott on Japanese products, initiated in July 2019, in the Korean beer market. First, we find that sales of Japanese beer decreased by 75 percent on average during the 14-month boycott period in the data. Second, the decrease in Japanese beer sales during the boycott period mostly reflected an increase in domestic beer sales, while demand for outside alternatives has been relatively stable. Third, the post-boycott demand curve of Japanese beer seems to be less elastic than the pre-boycott demand curve. Lastly, the intensity of the boycott effect has remained strong and stable despite a substantial decrease in traditional media coverage since the outbreak of the boycott movement. Our analysis addresses both price endogeneity, as firms may respond to the boycott by adjusting prices, and consumers' substitution to non-Japanese beers from Japanese beers by simulating the post-boycott beer sales had the boycott not occurred. The approach may provide more complete delineation of the effects of a boycott in the market, compared to previous studies that focused only on the boycotted products. Our empirical findings suggest that political tensions can severely distort market outcomes and disturb international trade in an extended period, and that the magnitude and persistence of the boycott may depend on consumer preferences and market conditions such as the existence of close substitutes along with social and political factors.
{"title":"No Beer No Friends: Quantifying the Effect of the Beer Boycott","authors":"I. Kim, Kyoo il Kim","doi":"10.2139/ssrn.3743919","DOIUrl":"https://doi.org/10.2139/ssrn.3743919","url":null,"abstract":"We study the impact of the boycott on Japanese products, initiated in July 2019, in the Korean beer market. First, we find that sales of Japanese beer decreased by 75 percent on average during the 14-month boycott period in the data. Second, the decrease in Japanese beer sales during the boycott period mostly reflected an increase in domestic beer sales, while demand for outside alternatives has been relatively stable. Third, the post-boycott demand curve of Japanese beer seems to be less elastic than the pre-boycott demand curve. Lastly, the intensity of the boycott effect has remained strong and stable despite a substantial decrease in traditional media coverage since the outbreak of the boycott movement. Our analysis addresses both price endogeneity, as firms may respond to the boycott by adjusting prices, and consumers' substitution to non-Japanese beers from Japanese beers by simulating the post-boycott beer sales had the boycott not occurred. The approach may provide more complete delineation of the effects of a boycott in the market, compared to previous studies that focused only on the boycotted products. Our empirical findings suggest that political tensions can severely distort market outcomes and disturb international trade in an extended period, and that the magnitude and persistence of the boycott may depend on consumer preferences and market conditions such as the existence of close substitutes along with social and political factors.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"43 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81437760","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-12-01DOI: 10.11575/SPPP.V13I0.71216
H. Stephens
The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which entered into force on December 20, 2018 for the six of the eleven signatories that had completed ratification at that time (Australia, Canada, Japan, Mexico, New Zealand and Singapore) is a beacon of hope in a dark protectionist landscape. The CPTPP advances the trade and investment liberalization agenda at a time when protectionist measures by some major trading countries are threatening to undo decades of progress. With respect to Taiwan, the Taiwanese government has made no secret of its interest in accession to the CPTPP. Taiwanese accession should be pursued because it is in the interest of Canada and the other members of the CPTPP to add to the strength of the organization by welcoming an economy like Taiwan that is an important global trader, a key player in global supply chains and is willing and able to accept CPTPP disciplines. Canada is the second largest economy in the CPTPP and can play an important role in getting the accession process started, including supporting the extension of an invitation to Taiwan to begin negotiations. It’s time to move from talk to action.
{"title":"Challenges and Prospects for the CPTPP in a Changing Global Economy: Taiwanese Accession and Canada’s Role.","authors":"H. Stephens","doi":"10.11575/SPPP.V13I0.71216","DOIUrl":"https://doi.org/10.11575/SPPP.V13I0.71216","url":null,"abstract":"The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which entered into force on December 20, 2018 for the six of the eleven signatories that had completed ratification at that time (Australia, Canada, Japan, Mexico, New Zealand and Singapore) is a beacon of hope in a dark protectionist landscape. The CPTPP advances the trade and investment liberalization agenda at a time when protectionist measures by some major trading countries are threatening to undo decades of progress. With respect to Taiwan, the Taiwanese government has made no secret of its interest in accession to the CPTPP. Taiwanese accession should be pursued because it is in the interest of Canada and the other members of the CPTPP to add to the strength of the organization by welcoming an economy like Taiwan that is an important global trader, a key player in global supply chains and is willing and able to accept CPTPP disciplines. Canada is the second largest economy in the CPTPP and can play an important role in getting the accession process started, including supporting the extension of an invitation to Taiwan to begin negotiations. It’s time to move from talk to action.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"18 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76588141","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The U.S. complaint about Chinese tariff-rate quotas (TRQs) on certain grain products helps illustrate several key issues in U.S. - China trade relations and the effectiveness of WTO disputes. First, do international obligations based on transparency and fairness work in relation to an authoritarian country not known for the rule of law domestically? Second, can there be a disconnect between the legal aspects of a dispute and the underlying economic interests, with a DSB ruling sometimes not leading to improved trade flows? And third, given the bilateral trade war and "phase one" trade deal between the United States and China, has the WTO been superseded in this trade relationship? This paper summarizes the facts and law of the China - TRQs dispute, and examines each of these questions in that context.
{"title":"China - Tariff Rate Quotas for Certain Agricultural Products: Against the Grain: Can the WTO Open Chinese Markets? A Contaminated Experiment","authors":"J. Glauber, S. Lester","doi":"10.2139/ssrn.3745609","DOIUrl":"https://doi.org/10.2139/ssrn.3745609","url":null,"abstract":"The U.S. complaint about Chinese tariff-rate quotas (TRQs) on certain grain products helps illustrate several key issues in U.S. - China trade relations and the effectiveness of WTO disputes. First, do international obligations based on transparency and fairness work in relation to an authoritarian country not known for the rule of law domestically? Second, can there be a disconnect between the legal aspects of a dispute and the underlying economic interests, with a DSB ruling sometimes not leading to improved trade flows? And third, given the bilateral trade war and \"phase one\" trade deal between the United States and China, has the WTO been superseded in this trade relationship? This paper summarizes the facts and law of the China - TRQs dispute, and examines each of these questions in that context.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"4 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88757214","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, I review evidence on changing global specialization in labor-intensive exporting. Production of apparel, footwear, furniture, and related products are how many low-income countries first enter export manufacturing. Just as China’s rise as a powerhouse in these goods supplanted a role previously occupied by the East Asian Tigers, the world may again be on the cusp of significant change in where labor-intensive goods are produced. China’s prowess in these sectors peaked in the early 2010s; its share in their global exports, while still substantial, is now in decline. Mechanisms through which the global economy may adjust to China’s graduation into more technologically sophisticated activities include expanded labor-intensive export production in other emerging economies and labor-saving technological change in products currently heavily reliant on less-educated labor. Available evidence suggests that the first mechanism is operating slowly and the second hardly at all. As a third mechanism, China may in part replace itself by moving labor-heavy factories out of densely populated and expensive coastal cities and into the country’s interior. Such a transition, though still in its infancy, would mirror the decentralization of manufacturing production in the U.S. and Europe, which occurred after World War II.
{"title":"Who Will Fill China’s Shoes? The Global Evolution of Labor-Intensive Manufacturing","authors":"Gordon H. Hanson","doi":"10.2139/ssrn.3766567","DOIUrl":"https://doi.org/10.2139/ssrn.3766567","url":null,"abstract":"In this paper, I review evidence on changing global specialization in labor-intensive exporting. Production of apparel, footwear, furniture, and related products are how many low-income countries first enter export manufacturing. Just as China’s rise as a powerhouse in these goods supplanted a role previously occupied by the East Asian Tigers, the world may again be on the cusp of significant change in where labor-intensive goods are produced. China’s prowess in these sectors peaked in the early 2010s; its share in their global exports, while still substantial, is now in decline. Mechanisms through which the global economy may adjust to China’s graduation into more technologically sophisticated activities include expanded labor-intensive export production in other emerging economies and labor-saving technological change in products currently heavily reliant on less-educated labor. Available evidence suggests that the first mechanism is operating slowly and the second hardly at all. As a third mechanism, China may in part replace itself by moving labor-heavy factories out of densely populated and expensive coastal cities and into the country’s interior. Such a transition, though still in its infancy, would mirror the decentralization of manufacturing production in the U.S. and Europe, which occurred after World War II.","PeriodicalId":14394,"journal":{"name":"International Political Economy: Trade Policy eJournal","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90935391","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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