Journal
STRUCTURAL CHANGE AND ECONOMIC DYNAMICS
Volume 61, Issue -, Pages 103-126Publisher
ELSEVIER
DOI: 10.1016/j.strueco.2022.02.001
Keywords
Structural changes; Trade liberalization; China
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Funding
- UC Davis
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Notable heterogeneity regarding international trade openness and level of development across different regions with significant inter-provincial migration has been a prominent feature in contemporary China. This paper studies the particular role of international trade in the structural transformation across each region in China. Combining several data, we document that there exhibits a non-monotone, hump-shaped relationship between international trade freeness and prefecture-level manufacture labor share in China. We rationalize this stylized fact in a spatial equilibrium model with multi-region, multi-sector, costly trade and endogenous allocation of labor, capital, and land. The analysis highlights the role of internal geography in shaping patterns of trade-induced structural change.
Notable heterogeneity regarding international trade openness and level of development across different regions with significant inter-provincial migration has been a prominent feature in contemporary China. This paper studies the particular role of international trade in the structural transformation across each region in China. Combining several data, we document that there exhibits a non-monotone, hump-shaped relationship between international trade freeness and prefecture-level manufacture labor share in China. We rationalize this stylized fact in a spatial equilibrium model with multi-region, multi-sector, costly trade and endogenous allocation of labor, capital, and land. The analysis highlights the role of internal geography in shaping patterns of trade-induced structural change.(c) 2022 Elsevier B.V. All rights reserved.
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