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Exports, FDI, Growth Of Small Rural Enterprises And Employment In China

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  • Xiaolan Fu
  • V.N.Balasubramanyam

Abstract

This paper analyses the growth of employment in China during the post reform period. It argues that the Chinese experience with export-led growth provides an excellent example of the phenomenon of a vent for surplus productive capacity provided by exports, identified by Adam Smith in the Wealth of Nations and elaborated by Hla Myint. The paper extends the Smith-Myint model of ‘vent-for-surplus’ productive capacity to ‘vent-for-surplus’ resources by allowing foreign investment inflows. The ‘vent-for-surplus’ effect of exports on employment growth is examined in a dynamic labour demand framework for a panel of township and village enterprises (TVEs) in China.

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File URL: http://www.cbr.cam.ac.uk/pdf/WP286.pdf
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Bibliographic Info

Paper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp286.

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Date of creation: Jun 2004
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Handle: RePEc:cbr:cbrwps:wp286

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Web page: http://www.cbr.cam.ac.uk/

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Keywords: exports; foreign direct investment; small and medium-enterprises; employment;

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  1. V N Balasubramanyam & X Fu, 2002. "Township and village enterprises in China," Working Papers 539923, Lancaster University Management School, Economics Department.
  2. Fan Gang & Maria Rosa Lunati & David O’Connor, 1998. "Labour Market Aspects of State Enterprise Reform in China," OECD Development Centre Working Papers 141, OECD Publishing.
  3. Anthony Philip Thirlwall, 1979. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 32(128), pages 45-53.
  4. Kiviet, Jan F., 1995. "On bias, inconsistency, and efficiency of various estimators in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 68(1), pages 53-78, July.
  5. Greenaway, David & Hine, Robert C. & Wright, Peter, 1999. "An empirical assessment of the impact of trade on employment in the United Kingdom," European Journal of Political Economy, Elsevier, vol. 15(3), pages 485-500, September.
  6. Kaldor, Nicholas, 1975. "What Is Wrong with Economic Theory," The Quarterly Journal of Economics, MIT Press, vol. 89(3), pages 347-57, August.
  7. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
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