NSE Seminar

Structural Adjustments and International Trade: Theory and Evidence from China

Time：15:30-17:00, March 3, 2017
Venue：Wanzhonglou Classroom, NSD, PKU
Host：Yong WANG, Xin WANG, Jiajun XU
Speaker：Jiandong JU (Dean of School of International Business, Shanghai University of Finance and Economics; Visiting Professor at PBC School of Finance at Tsinghua University)

 

【Abstract】

We document the patterns of structural adjustments in Chinese manufacturing production and export: production became more capital intensive while export did not;firms' export participation increased in the labor intensive industries but declined in the capital intensive industries from 1999to 2007. To explain these seemingly puzzling patterns, we embed heterogeneous firm (Melitz 2003)into the Dornbusch-Fischer-Samuelson model of both Ricardian and Heckscher-Ohlin (1977, 1980).We structurally estimate the model and find that capital deepening more than doubled the capital labor ratio of China, technology improved significantly but favored the labor intensive industries and trade liberalization reduced variable trade costs by about a quarter. Counterfactual simulations show that capital deepening made Chinese production capital intensive, but technology change that bias towards the labor intensive industries provided a counterbalancing force. We also find that the Melitzian export selection mechanism shapes Ricardian comparative advantage extensively and contributes to about 2.1% of productivity growth during this period.

 

【Speaker】

JU Jiandong, Chang Jiang Scholar of the Chinese Ministry of Education, dean and professor of Economics at School of International Business Administration, Shanghai University of Finance and Economics, also a visiting professor in PBC School of Finance at Tsinghua University. He also serves as the director of Center for International Economic Research at Tsinghua University.  After receiving his doctorate in Economics from Pennsylvania State University in 1995, he served as assistant, associate and full professor at University of Oklahoma and professor at School of Economics and Management in Tsinghua University. He was a resident scholar in International Monetary Fund, and consulted for World Bank and other policy organizations. He focused his research on International Trade, International Finance and Industrial Organization, and the main teaching course is Advanced International Trade. His work has been published in American Economic Review, Journal of International Economics, Journal of Monetary Economics, American Economic Journal and many other journals.

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