nep-cna New Economics Papers
on China
Issue of 2016‒08‒14
three papers chosen by
Zheng Fang
Ohio State University

  1. Firm Response to Competitive Shocks: Evidence from China's Minimum Wage Policy By Hau, Harald; Huang, Yi; Wang, Gewei
  2. Achievement Goal and Life Satisfaction: The Mediating Role of Perception of Successful Agency and the Moderating Role of Emotion Reappraisal By Wang, Wangshuai; Li, Jie; Sun, Gong; Zhang, Xin-an; Cheng, Zhiming
  3. Examining The Impact of ASEAN-China Free Trade Agreement on Indonesian Manufacturing Employment By Koon Peng Ooi

  1. By: Hau, Harald; Huang, Yi; Wang, Gewei
    Abstract: The large regional variation of minimum wage changes in 2002-08 implies that Chinese manufacturing firms experienced competitive shocks as a function of firm location and their low-wage employment share. We find that minimum wage hikes accelerate the input substitution from labor to capital in low-wage firms, reduce employment growth, but also accelerate total factor productivity growth--particularly among the less productive firms under private Chinese or foreign ownership, but not among state-owned enterprises. The heterogeneous firm response to labor cost shocks can be explained by differences in governance or management practice, but is difficult to reconcile with the idea that competitive pressure is a substitute for governance quality.
    Keywords: Firm productivity; management quality; minimum wage policy
    JEL: D24 G31 J24 J31 O14
    Date: 2016–08
  2. By: Wang, Wangshuai; Li, Jie; Sun, Gong; Zhang, Xin-an; Cheng, Zhiming
    Abstract: Achievement goal is a cognitive representation that guides behavior to a competence-related future end state. Existing theories and empirical findings imply that achievement goal is potentially related to life satisfaction. However, the relationship between achievement goal and life satisfaction remains relatively unexplored in the psychology literature. In this study we examined how, and when, achievement goal affects life satisfaction, using original survey data from China. The results suggested that achievement goal was positively related to life satisfaction, that the perception of successful agency fully mediated the relationship between achievement goal and life satisfaction, and that emotion reappraisal moderated the relationship between achievement goal and life satisfaction. Our study helps reveal the positive influence of achievement goal on life satisfaction, and provides an understanding of the mechanism and boundary condition of this influence.
    Keywords: achievement goal, perception of successful agency, emotion reappraisal, life satisfaction
    JEL: I31 J28
    Date: 2016–08–04
  3. By: Koon Peng Ooi
    Abstract: There are very few studies that explicitly examine the costs and benefits of participating in regional trade agreements (henceforth RTAs), especially for developing countries. This is an important research question given that many developing countries are currently involved in negotiating RTAs, such as the Trans-Pacific Partnership (TPP), the Regional Comprehensive Partnership Agreement (RCEP) and the Pacific Alliance. This paper attempts to address this gap in the trade literature by analyzing the impact of the ASEAN-China Free Trade Agreement (ACFTA) on Indonesian manufacturing employment. It finds that even though the increase in the preference margin for China decreases employment by 2.60% (80,000 jobs lost), the reciprocal increase in the preference margin for Indonesia increases employment by 0.81% (25,000 jobs created) in export-oriented industries. These results highlight that the trade-off in an RTA is not merely between improving long-run productivity and increasing short-run unemployment in import-competing industries, as conventional trade literature may suggest. Within employment, there is a further trade-off between the contraction of import-competing industries and the expansion of export-oriented industries. Further, plant-level analysis reveals that these employment changes are attributed equally to job creation and job destruction. In addition, there is no evidence that the ACFTA increased the rate of job reallocation. Finally, this paper also shows that the impact of trade liberalization differs according to plant and worker characteristics. In Indonesia, large domestic plants are more severely affected by import competition than small plants or foreign plants. However, they are also the only ones that leveraged on the reduction in trading partner’s tariff rates and expand. In terms of workers, I find that employment changes are more volatile for production workers than non-production workers.
    Keywords: Trade Policy; Economic Integration; Trade and Labour Market Interactions
    JEL: F15 F16 J21
    Date: 2016

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