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Exporting Out of Agriculture: The Impact of WTO Accession on Structural Transformation in China

Author

Listed:
  • Bilge Erten

    (Northeastern University)

  • Jessica Leight

    (International Food Policy Research Institute)

Abstract

This paper analyzes the effect of China's accession to the World Trade Organization in 2001 on structural transformation at the local level, exploiting cross-sectional variation in tariff uncertainty faced by county economies pre-2001. Using a new panel of 1,800 Chinese counties from 1996 to 2013, we find that counties more exposed to the reduction in tariff uncertainty postaccession are characterized by increased exports and foreign direct investment, shrinking agricultural sectors, expanding secondary sectors, and higher total and per capita GDP. In addition, when labor substitutes from nonagricultural to agricultural production in counties exposed to positive trade shocks, agricultural output declines.

Suggested Citation

  • Bilge Erten & Jessica Leight, 2021. "Exporting Out of Agriculture: The Impact of WTO Accession on Structural Transformation in China," The Review of Economics and Statistics, MIT Press, vol. 103(2), pages 364-380, May.
    • Handle: RePEc:tpr:restat:v:103:y:2021:i:2:p:364-380
    DOI: 10.1162/rest_a_00852
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    Cited by:

    1. Erten, Bilge & Leight, Jessica & Zhu, Lianming, 2023. "The Effects of FDI Liberalization on Structural Transformation and Demographic Change: Evidence from China," IZA Discussion Papers 16094, Institute of Labor Economics (IZA).
    2. Bilge Erten & Pinar Keskin, 2024. "Trade-offs? The Impact of WTO Accession on Intimate Partner Violence in Cambodia," The Review of Economics and Statistics, MIT Press, vol. 106(2), pages 322-333, March.
    3. Bilge Erten & Pinar Keskin, 2024. "Trade-offs? The Impact of WTO Accession on Intimate Partner Violence in Cambodia," The Review of Economics and Statistics, MIT Press, vol. 106(2), pages 322-333, March.
    4. Duan, Yuwan & Dietzenbacher, Erik & Los, Bart & Yang, Cuihong, 2021. "How much did China's emergence as “the world's factory” contribute to its national income?," China Economic Review, Elsevier, vol. 69(C).
    5. Shuguang Liu & Xiaowen Tang & Yubin Zhao, 2024. "Global Value Chain Participation, Employment Structure, and Urban–Rural Income Gap in the Context of Sustainable Development," Sustainability, MDPI, vol. 16(5), pages 1-19, February.
    6. Zhou, Shen & He, Bing & Ni, He-yong-le & Pang, Shuqing, 2022. "Trade liberalization and regional labor market dynamics: Evidence from China’s WTO accession," Journal of International Money and Finance, Elsevier, vol. 125(C).
    7. Cui, Chuantao & Li, Leona Shao-Zhi, 2023. "Trade policy uncertainty and new firm entry: Evidence from China," Journal of Development Economics, Elsevier, vol. 163(C).

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