Trade liberalisation and labour shares in China

Research output: Contribution to journalArticle

Abstract

We estimate the extent to which firms responded to tariff reductions associated with China's WTO entry by altering labour's share of value. Firm-level regressions indicate that firms in industries subject to tariff cuts raised labour's share relative to economy-wide trends, both through input choices and rent sharing. Our estimates suggest that, on average, an industry that experienced no reductions in output or input tariffs would have a 15.7% lower labour share of value in 2007 than it actually did, assuming the same economy-wide trends. There is significant variation across firms: the impact attenuates with geographic remoteness and union presence and strengthens with foreign ownership.

Original languageEnglish (US)
JournalWorld Economy
DOIs
StateAccepted/In press - Jan 1 2019

Keywords

  • China
  • labour shares
  • trade liberalisation

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

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