Impact of Trade on Canada's Employment,Skill and Wage Structure

Using newly constructed data for 88 Canadian industries (including primary, manufacturing and services), for 15 years (1992–2007), we analyse the impact of trade and technological change on labour demand, skill structure, wage premiums and welfare in Canada. Results show that export growth has no impact, whereas import growth reduces employment growth. But contrary to popular belief, Canada's job loss due to imports has been very small, only about 6,000 persons annually. China's negative impacts are more pronounced in industries where the share of information and communication technology (ICT) capital is rising fast and among low R&D intensive industries. In terms of skill change, ICT use and real exchange rate appreciation are biased towards high skill workers. Imports from the United States and China are skill‐neutral, whereas imports from Mexico are skill‐upgrading. Overall, neither export nor import growth has an impact on the wage rate. However, had there been no imports from China, the annual wage growth rate of high skill manufacturing workers would have been 0.6 per cent higher. Between 1992 and 2007, there was an annual net gain from the rise in imports at about 0.4 per cent of GDP, in addition to the gains obtained from 1992 import levels vis‐à‐vis autarky.     

Labour market characteristics and surviving import shocks

This paper investigates whether different labour market characteristics amplify or dampen the local labour market impacts from Chinese import competition exposure. I exploit state‐level variation in initial, pre‐shock labour market characteristics and regional variation across local labour markets in exposure to Chinese imports for identification. I find that local labour markets in states with higher union density experience more severe adverse consequences as a result of increased import exposure. Conversely, higher initial minimum wages help mute the negative impacts of the China shock. I also provide some evidence that exceptions to employment‐at‐will legislation can affect employment responses to increased Chinese imports. Finally, examining all policies together in an index, I show that higher levels of policies intended to benefit and protect workers can actually magnify the extent of the damage inflicted by import competition. My results suggest that initial labour market characteristics and policies can play an important role in understanding why local labour markets react differently to trade shocks.     

Import Competition and Labor Productivity

The impact of import competition on labor productivity is examined using panel data for a sample of Australian manufacturing firms over the period 1984–1993. Import competition is found to interact with domestic competition; such the positive impact of import competition on the level and rate of growth of labor productivity rises with the degree of concentration among domestic producers. The results suggest that lowering border protection on manufactured imports into Australia has led to enhanced productivity from domestic producers, especially from those producers in highly concentrated industries.     

The Performance of Trading Firms in the Services Sectors – Comparable Evidence from Four EU Countries

We examine trade complexity and the implications of adding additional dimensions of trade for firm performance among services producers. We use unique firm‐level data to compare these patterns across four EU countries. Overall, services firms are relatively less engaged in trade than manufacturing firms; they mostly trade goods and are more likely to import than to export. Trade in services is quite rare; services are more likely to be traded by firms already trading goods. Trading firms in the services sectors are significantly larger, more productive and pay higher wages than non‐traders. Two‐way traders outperform one‐way traders. Changes in trading status by either adding another dimension of trade (imports, exports) or another type of product (goods, services) are infrequent and are associated with significant preswitching premia. In contrast, learning effects from switching trading status are uncommon. This points to significant fixed cost of being engaged in trade and confirms some previous findings that trading services firms have similar traits as their manufacturing counterparts. Apart from greater trade participation in smaller countries, we do not observe systematic differences in terms of trade or switching premia between the four countries that might be attributable to differences in country characteristics.     

Market Structure and Market Access

We explore an issue at the nexus of domestic competition policy and international trade, the interaction between goods trade and market power in domestic trade and distribution sectors. We examine the effect of variations in conditions of domestic competition in services on trade volumes in goods in the cases of both linear and nonlinear import demand, including standard form CES‐based gravity models of bilateral trade flows. Theory suggests a set of linkages between service‐sector pricing and goods trade supported by econometrics involving imports of 22 OECD countries vis‐a‐vis 69 exporters. Competition in distribution services affects the volume of trade in goods. Additionally, because of interaction between tariffs and pricing, the market structure of the domestic service sector becomes increasingly important as tariffs are reduced. Indeed, depending on the degree of competition, market access concessions on tariffs may be effectively undone in some cases by changes in margins. For exporters, we find that service competition in destination markets matters most for exporters from smaller, poorer countries. Our results also suggest that while negotiated agreements leading to cross‐border services liberalisation may boost goods trade as well, they may also lead to a fall in goods trade when such liberalisation involves FDI leading to increased service sector concentration.     

进口竞争与企业产品专业化--基于中国多产品企业的研究

本文以企业内部资源配置为视角,检验了进口竞争对企业内部产品专业化的影响。研究发现,进口竞争显著地促进了中国企业的产品专业化程度。进口竞争的加剧促使企业缩小产品生产范围,使其将资源集中到少数核心产品的专业化生产和销售上来。这一过程伴随着企业产品种类的减少和企业整体产品范围偏度的集中。本文利用中国对外反倾销冲击作为进口竞争程度下降的拟自然实验,考察了企业是否受反倾销保护对其产品专业化程度影响的因果效应。进一步的异质性检验表明,相比加工贸易而言,一般贸易产生的进口竞争对企业产品专业化的促进作用更大;相比低收入国家而言,来自高收入国家的进口竞争对企业产品专业化的促进作用更大。本研究对如何理解进口竞争对中国经济发展的影响,提供了来自企业内部产品配置的证据。     

广东与东盟农产品贸易的竞争性与互补性分析

文章运用出口相似性指数、贸易互补性指数对广东与东盟农产品贸易的竞争性和互补性进行的分析表明:在世界市场上,广东和东盟存在着激烈的竞争关系,从时间序列来看,最近几年竞争程度有所减弱;广东出口与东盟进口的贸易互补性在不断减弱,而广东进口与东盟国家出口的互补性在不断增强,广东与东盟农产品贸易之间存在一定的互补性.     

Productivity Growth,Protection and Plant Entry in a Deregulating Economy: The Case of India

In this paper we study the comparative performance of Indian manufacturing industries during relatively recent periods of domestic regulation and de-regulation of plant entry. The period of de-regulation is accompanied by largely unchanging levels of import competition and higher output growth. The growth of labour and total factor productivity (TFPG) is observed to be higher during the deregulation period. We use data on 42 three-digit manufacturing industries. Our sample covers consumer, intermediate and capital good industries. We study the relationship between levels of effective protection and total factor productivity growth (TFPG). We found that increasing effective rates of protection was not associated with lower TFPG. We test the hypothesis that higher degree of trade protection induces greater entry of plants. This hypothesis is statistically supported. Our econometric estimates found a positive association between net entry and TFPG, after controlling for inter-industry differences in effective protection, asset size of plants and demand growth. Our results support the proposition that competition positively contributes to TFPG during deregulation.     

Workers’ Participation in Training and Import Competition: Evidence from the USA

Merging industry‐level data on imports into the NLSY79 cohort data, we examine the relationship between rising imports and the amount of time workers in the US manufacturing sector spend in training events. A simple theoretical model shows the effect of foreign competition may depend on the type of training. Controlling for both industry and individual fixed effects, we find that rising imports lead workers to spend less time in training for the purpose of career advancement. There is some evidence this effect is stronger for less educated and lower ability workers.     

The Effects of Offshoring on Post‐displacement Wages: Evidence from the United States

This paper studies the effects of offshoring on post‐displacement wages using a large and nationally representative sample of US workers displaced from a manufacturing industry during the 1990s. The empirical results based on Mincerian regressions of individual re‐employment earnings on industry‐level offshoring proxies, show that the effects of offshoring on post‐displacement wages are negative, although not economically large. The preferred specifications suggest, in fact, that a one percentage point increase in offshoring in the pre‐displacement industry reduces earnings on the new job by approximately 0.3–0.6 per cent. These figures imply that the cumulative rise in offshoring over the sample period may have led to a drop of between US$110 and US$330 in the yearly re‐employment wages of US displaced workers. While the magnitude of the effect is largely independent of individual characteristics such as gender, age, occupation and educational level, it does depend on the duration of non‐employment and on workers’ industrial reallocation after displacement. In particular, the effects are relatively stronger for individuals who stay longer before finding a new job, as well as for those who leave the pre‐displacement industry after the job loss.     

Can labour market institutions mitigate the China syndrome? Evidence from regional labour markets in Europe

This paper investigates how labour market regulations alter the adverse impact of rising import competition from China in European local labour markets between 1997 and 2006. The paper constructs measures of regional exposure to Chinese imports based on previous literature and on regional labour market frictions exploiting involuntary labour reallocations. Taking into account the endogeneity of import competition and its interaction with labour market regulations, the paper finds that regions more exposed to the rise of China have suffered from a reduction in manufacturing employment shares. This shock grows larger with regional labour market frictions; hence, it exacerbates the impact of trade shock on employment. Moreover, the paper finds that employment in public services, and not in construction or private services sector, absorbed the negative shock to the manufacturing sector. The unemployment rate, the labour force participation rate and wages in all sectors are unresponsive to import competition from China.     

国际贸易、技术进步对相对工资差距的影响——基于我国制造业数据的实证分析

笔者运用2000-2005年的面板数据模型分析了我国制造业27个细分行业的对外贸易、技术进步等因素对行业相对工资差距的影响,并进一步将27个细分行业按照要素密集度的不同分为三种类型,分别分析了技术密集型、劳动密集型和资本密集型行业的进出口贸易、技术进步等变量对相对工资差距的影响。结论如下:在不考虑制造业行业特征的情形下,行业的对外贸易引起相对工资差距的扩大,行业的技术进步对相对工资差距的影响是不显著的;在将对外贸易分解为进口贸易和出口贸易的情形下,进口贸易引起相对工资差距的扩大,技术进步引起相对工资差距的缩小;在考虑制造业行业特征的情形下,行业要素密集度的不同会导致进、出口贸易和技术进步对相对工资差距产生不同的影响。     

Markups,import competition and exporting

This paper analyses the relationship between markups and international trade at the firm level using a large sample of French manufacturing firms for the period 1995–2007. In particular, the paper investigates the effect of increasing import competition from China on firms' price–cost margins and the way in which exporting interacts with this effect. The results show robust evidence that firms in more direct competition with Chinese imports decrease their markups. However, firms that become exporters experience a smaller reduction in their price–cost margins. Consistent with these findings, the results also show that firms facing tougher competition from China are more likely to start exporting to avoid such competitive pressures.     

The influence of changing trade patterns on displacements of labor

Although there is extensive literature detailing the change in industrial employment resulting from changes in trading patterns, there is no significant literature that translates these changes in labor demand to actual worker hardship. This study provides evidence of the labor market effects of changes in import and export competition throughout the 1980s by focusing on the level of industry displacements, workers involuntarily separated from their industry of employment, rather than changes in the level of industry employment. The results therefore shed light on the number of workers who were measurably injured by changing trade patterns.

The analysis is based on a general equilibrium specification that yields an equation describing the influence of specific industry measures of competitiveness, along with changes in the aggregate environment, on displacements. This equation is subsequently estimated using import and export transactions prices maintained by the U.S. Department of Labor in conjunction with data from a series of Displaced Workers Surveys. Counterfactual analysis provides an estimate of the number of displacements resulting from changes in international competitiveness. These counterfactuals reveal that, overall, changes in the competitive position of the United States reduced the number of workers dislocated throughout the 1980s.     

The exchange rate,employment and hours: What firm-level data say

Using a representative panel of manufacturing firms, we estimate the response of job and hours worked to currency swings, showing that it depends primarily on firms' exposure to foreign sales and their reliance on imported inputs. We also show that, for a given international exposure, the response to exchange rate fluctuations is magnified when firms exhibit a lower monopoly power and when they face foreign pressure in the domestic market through import penetration. The degree of substitutability between imported and other inputs and the distribution of workers by type introduce additional degrees of specificity in the employment sensitivity to exchange rate swings. Moreover, we show that episodes of entry and exit in the export market are associated with a heterogeneous employment response depending on the degree of external orientation when the switch of export status occurs.     

The exchange rate, employment and hours: What firm-level data say

Using a representative panel of manufacturing firms, we estimate the response of job and hours worked to currency swings, showing that it depends primarily on firms' exposure to foreign sales and their reliance on imported inputs. We also show that, for a given international exposure, the response to exchange rate fluctuations is magnified when firms exhibit a lower monopoly power and when they face foreign pressure in the domestic market through import penetration. The degree of substitutability between imported and other inputs and the distribution of workers by type introduce additional degrees of specificity in the employment sensitivity to exchange rate swings. Moreover, we show that episodes of entry and exit in the export market are associated with a heterogeneous employment response depending on the degree of external orientation when the switch of export status occurs.     

进口竞争与多产品企业出口二元边际

运用2000~2006年中国工业数据库和海关数据库的匹配面板数据,本文研究了进口竞争与多产品企业出口二元边际的关系。研究发现:(1)进口竞争显著提高了多产品企业出口的集约边际和扩展边际,且对集约边际的促进作用更强;(2)区分贸易类型的研究发现,相比于一般贸易,进口竞争对加工贸易的边际促进效应更加显著;(3)分行业回归的结果表明,具有比较优势的行业,进口竞争对出口边际的促进效应更为显著。使用系统GMM模型控制可能存在的内生性,发现进口竞争对集约边际和扩展边际的促进作用依然稳健。     

Competitive Pressure in Transition: A Role for Trade and Competition Policies?

This paper investigates the effects of trade reforms and antitrust enforcement on the pricing behavior of firms, shedding light on the respective contributions of these policy instruments to the shaping of competitive markets. To this end, we use a rich panel data set of more than 25,000 manufacturing firms from Bulgaria, the Czech Republic, Estonia, Hungary, Poland, the Slovak Republic and Slovenia, spanning a 5-year period. We find a positive and statistically significant relationship between domestic firms’ mark-ups and industry protection, as reflected in MFN and trade-weighted import tariffs. The toughness of competition policy enforcement, captured by the number of final instance decisions delivered by national antitrust authorities and an index developed by the EBRD, has a negative impact of greater magnitude than import penetration. We also test for the significance of enacting major legislative amendments with regard to competition policy in the studied countries, as well as for differential effects in export-oriented and import-competing industries.     

Canada's Anti‐dumping and Safeguard Policies: Overt and Subtle Forms of Discrimination

Like many countries in the international trading system, Canada repeatedly faces political pressure from industries seeking protection from import competition. I examine Canadian policymakers’ response to this pressure within the economic environment created by its participation in discriminatory trade agreements such as the North American Free Trade Agreement (NAFTA). In particular, I exploit new sources of data on Canada's use of potentially WTO‐consistent import‐restricting policies such as anti‐dumping, global safeguards and a China‐specific safeguard. I illustrate subtle ways in which Canadian policymakers may be structuring the application of such policies so as to reinforce the discrimination inherent in Canada's external trade policy because of the preferences granted to the United States and Mexico through NAFTA.     

Mind the Gender Wage Gap – the Impact of Trade and Competition on Sectoral Wage Differences

This paper examines differences between women’s and men’s wages in 18 selected OECD countries in the period 1970 to 2005. The study is based on 12 manufacturing sector‐ and skill‐specific sets of panel data on the gender wage gap. We apply a system generalised method of moments (GMM) estimator to the extended version of the conditional gender wage gap convergence equation, controlling for sector concentration and industry‐specific measures of openness using a difference‐in‐difference approach: trade‐affected concentrated sectors versus trade‐affected competitive sectors. The results indicate that: (i) an increase in sector concentration is associated with wage gap growth; (ii) both import and export penetration are associated with a reduction of the high‐skill gender wage gap growth in concentrated industries; (iii) there is evidence of a widening impact of trade on the medium and low‐skill occupational gender wage gap growth in less competitive industries; (iv) institutional regulations of the labour market have an impact on the development of the gender wage gap: for highly‐skilled labour an increase in labour market regulation raises the growth of the gender wage gap, while for medium‐ and low‐skilled workers, it lowers it.