International Journal of Business and Economics Research

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Impact of Labor Mobility on Comparative Advantage of Manufacturing Industries in China: Empirical Analysis

Received: 07 March 2018    Accepted: 28 March 2018    Published: 28 April 2018
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Abstract

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.

DOI 10.11648/j.ijber.20180702.11
Published in International Journal of Business and Economics Research (Volume 7, Issue 2, April 2018)
Page(s) 25-30
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This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Labor Mobility, Comparative Advantage, Industry Volatility

References
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[3] 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.
[4] 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.
[5] Belloc M. Do Labor Market Institutions Affect International Comparative Advantage? An Empirical Investigation [J]. Department of Economics University of Siena, 2004.
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[7] Helpman E. Labor Market Frictions as a Source of Comparative Advantage, with Implications for Unemployment and Inequality [J]. CEPR Discussion Papers, 2010.
[8] 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.
[9] Wooton, I., & Haaland, J. I. (2007). Domestic labor market and foreign direct investment. Review of International Economics, 15 (3), 462-480.
[10] Redding, Stephen J., 2016. "Goods trade, factor mobility and welfare," Journal of International Economics, Elsevier, vol. 101 (C), pages 148-167.
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[12] 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.
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Author Information
  • School of Business, Nanjing Normal University, Nanjing, China

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    Shuang Zhao. (2018). Impact of Labor Mobility on Comparative Advantage of Manufacturing Industries in China: Empirical Analysis. International Journal of Business and Economics Research, 7(2), 25-30. https://doi.org/10.11648/j.ijber.20180702.11

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    Shuang Zhao. Impact of Labor Mobility on Comparative Advantage of Manufacturing Industries in China: Empirical Analysis. Int. J. Bus. Econ. Res. 2018, 7(2), 25-30. doi: 10.11648/j.ijber.20180702.11

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    AMA Style

    Shuang Zhao. Impact of Labor Mobility on Comparative Advantage of Manufacturing Industries in China: Empirical Analysis. Int J Bus Econ Res. 2018;7(2):25-30. doi: 10.11648/j.ijber.20180702.11

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  • @article{10.11648/j.ijber.20180702.11,
      author = {Shuang Zhao},
      title = {Impact of Labor Mobility on Comparative Advantage of Manufacturing Industries in China: Empirical Analysis},
      journal = {International Journal of Business and Economics Research},
      volume = {7},
      number = {2},
      pages = {25-30},
      doi = {10.11648/j.ijber.20180702.11},
      url = {https://doi.org/10.11648/j.ijber.20180702.11},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.ijber.20180702.11},
      abstract = {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.},
     year = {2018}
    }
    

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    T1  - Impact of Labor Mobility on Comparative Advantage of Manufacturing Industries in China: Empirical Analysis
    AU  - Shuang Zhao
    Y1  - 2018/04/28
    PY  - 2018
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    JF  - International Journal of Business and Economics Research
    JO  - International Journal of Business and Economics Research
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    AB  - 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.
    VL  - 7
    IS  - 2
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