Skip to main content
Disciplines
Automotive Business IT + Informatics Construction + Real Estate Electrical Engineering + Electronics Energy + Sustainability Insurance + Risk Finance + Banking Management + Leadership Marketing + Sales Mechanical Engineering + Materials
Events
DE
EN
Books
Journals
Topic Page
Marketing
Start single access now
Access for companies
EXTENDED SEARCH
Log in
Top
Eurasian Business Review
Published in: Eurasian Business Review 1/2023

25-05-2022 | Regular Article

Gains from trade or from catching-up? Value creation and distribution in the era of China’s WTO accession

Authors: Giovanni Dosi, Maria Enrica Virgillito, Xiaodan Yu

Published in: Eurasian Business Review | Issue 1/2023

Log in

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

In this article we focus on the role of exports in Chinese economic development in the era of WTO accession. We address a series of different, although connected, questions. First, do Chinese exporting and non-exporting firms differ in terms of their productivity performance and paid wages? Second, to what extent exporting and non-exporting firms have contributed to the process of convergence and catching-up? Third, does the productivity-wage pass-through differ between exporting and non-exporting firms? Overall our findings downplay the role of exporting firms as both carriers of labor productivity and wage growth for the Chinese economy. In this respect, “gains from catching-up” outweigh any “gain from trade”.
previous article Competing against ‘invisibles’: the effect of competition from informal firms on formal firms’ R&D
next article Small and internationalized firms competing with Chinese exporters

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now
Appendix
Available only for authorised users
Footnotes
1
Industry is defined to include mining, manufacturing and public utilities, according to NBSC. Five millions of RMB is approximately $US 600,000.
 
2
In 2003, the classification system was revised. Some sectors were further disaggregated, while others were merged together. To make the industry code comparable over time, we adopted the harmonized classification proposed in Brandt et al. (2012).
 
3
We dropped firms with missing, zero or negative output, value-added, sales, original value of fixed assets, with employment \(<8\).
 
4
For alternative definitions of entry into export see Bernini et al. (2016); Chen et al. (2019).
 
5
Note: deviation from the labor-weighted 4-digit wage mean.
 
6
The observed monotonic increasing pattern is robust to higher levels of aggregation with estimates of Eq. (4) pooling all manufacturing firms and including 2-digit sectoral dummies. Results are available upon request.
 
7
An extended model considering the role of the lagged productivity has been estimated. The coefficient is statistically different from zero. However, such coefficient is basically reducing the level of the contemporaneous variable without changing the shape along the quantile distribution.
 
8
Based on Wilcoxon signed-rank test, the median of the coefficient distribution at quantile 0.05 is significantly higher than zero, and based on Dunn test, the distribution of the coefficient at quantile 0.05 is significantly different from the distribution of coefficients at higher quantiles 0.50, 0.75 and 0.95 at 0.01 significance level.
 
9
Based on Dunn test, the coefficient distribution at quantile 0.10 is significantly different from the coefficient distributions at the other upper quantiles (0.50, 0.75 and 0.95) at 0.05 significance level. Based on Wilcoxon signed-rank test, the median of the coefficient distribution at quantile 0.05 is significantly lower than zero. Both patterns are confirmed under CREM estimation.
 
10
The matched control firm is chosen from never-exporters in the same CIC 4-digit sector, of the same age as the switching firm, and with the closest employment size to the switching firm in the data year prior to exporting. The timing index dummies for control firms are all set to zero.
 
11
We also estimate the models only controlling for industry and year dummies, and controlling for size. These specifications yield very similar results which are available upon request.
 
12
We also estimated the model specification only controlling for 2-digit sectoral and year effects, and for size effect. The results are very similar and are available upon request.
 
Literature
Angrist, J. D., & Pischke, J.-S. (2008). Mostly harmless econometrics: An empiricist’s companion. Princeton University Press.CrossRef
Balasubramanian, N., & Sivadasan, J. (2011). What happens when firms patent? New evidence from us economic census data. The Review of Economics and Statistics, 93(1), 126–146.CrossRef
Bernard, A., & Bradford, J. (1999). Exceptional exporter performance: Cause, effect, or both? Journal of International Economics, 47, 1–25.CrossRef
Bernini, M., Du, J., & Love, J. H. (2016). Explaining intermittent exporting: Exit and conditional re-entry in export markets. Journal of International Business Studies, 47(9), 1058–1076.CrossRef
Brandt, L., Van Biesebroeck, J., & Zhang, Y. (2012). Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing. Journal of Development Economics, 97(2), 339–351.CrossRef
Chen, J., Sousa, C. M., & He, X. (2019). Export market re-entry: Time-out period and price/quality dynamisms. Journal of World Business, 54(2), 154–168.CrossRef
Cimoli, M., G. Dosi, and J. E. Stiglitz (Eds.) (2009). The political economy of capabilities accumulation: The past and future of policies for industrial development. Oxford University Press.
Clerides, S. K., Lach, S., & Tybout, J. R. (1998). Is learning by exporting important? Micro-dynamic evidence from Colombia, Mexico, and Morocco. The Quarterly Journal of Economics, 113(3), 903–947.CrossRef
Dosi, G. (1988). Sources, procedures, and microeconomic effects of innovation. Journal of Economic Literature, 26(3), 1120–1171.
Dorn D, Hanson G, Majlesi K. (2020). Importing political polarization? The electoral consequences of rising trade exposure. American Economic Review, 110(10), 3139–83.
Dosi, G., & Soete, L. (1983). Technology gaps and cost-based adjustment: Some explorations on the determinants of international competitiveness. Metroeconomica, 35(3), 197–222.CrossRef
Dosi, G., Virgillito, M. E., & Yu, X. (2020). The wage-productivity nexus in the world factory economy. World Development, 129, 104875.CrossRef
Dosi, G., Riccio, F., & Virgillito, M. E. (2021). Varieties of deindustrialization and patterns of diversification: why microchips are not potato chips. Structural Change and Economic Dynamics, 57, 182–202.CrossRef
Grazzi, M., Mathew, N., & Moschella, D. (2021). Making one’s own way: Jumping ahead in the capability space and exporting among Indian firms. Journal of Evolutionary Economics, 31(3), 1–27.CrossRef
Krugman, P. (1980). Scale economies, product differentiation, and the pattern of trade. The American Economic Review, 70(5), 950–959.
Krugman, P. R. (1981). Intraindustry specialization and the gains from trade. Journal of Political Economy, 89(5), 959–973.CrossRef
Lileeva, A., & Trefler, D. (2010). Improved access to foreign markets raises plant-level productivity for some plants. The Quarterly Journal of Economics, 125(3), 1051–1099.CrossRef
Melitz, M. J., & Trefler, D. (2012). Gains from trade when firms matter. Journal of Economic Perspectives, 26(2), 91–118.CrossRef
Nelson, R. R. (1991). Why do firms differ, and how does it matter? Strategic Management Journal, 12(S2), 61–74.CrossRef
Pavitt, K. (1984). Sectoral patterns of technical change: Towards a taxonomy and a theory. Research Policy, 13(6), 343–373.CrossRef
van Ark, B., & Timmer, M. (2003). Asia’s productivity performance and potential: The contribution of sectors and structural change. In The Conference Board.
Yu, X., Dosi, G., Lei, J., & Nuvolari, A. (2015). Institutional change and productivity growth in China’s manufacturing: The microeconomics of knowledge accumulation and “creative restructuring.” Industrial and Corporate Change, 24(3), 565–602.CrossRef
Metadata
Title
Gains from trade or from catching-up? Value creation and distribution in the era of China’s WTO accession
Authors
Giovanni Dosi
Maria Enrica Virgillito
Xiaodan Yu
Publication date
25-05-2022
Publisher
Springer International Publishing
Published in
Eurasian Business Review / Issue 1/2023
Print ISSN: 1309-4297
Electronic ISSN: 2147-4281
DOI
https://doi.org/10.1007/s40821-022-00212-5

Other articles of this Issue 1/2023

Eurasian Business Review 1/2023 Go to the issue

Regular Article

Competing against ‘invisibles’: the effect of competition from informal firms on formal firms’ R&D

Regular Article

The knowledge-intensive direction of technological change

Regular Article

Do innovation and financial constraints affect the profit efficiency of European enterprises?

Regular Article

Knowledge inheritance and performance of spinouts

Regular Article

Distributional effects of COVID-19

Regular Article

Investment expectations by vulnerable European firms in times of COVID