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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.

Suggested Citation

  • Xiaolan Fu & V.N.Balasubramanyam, 2004. "Exports, FDI, Growth Of Small Rural Enterprises And Employment In China," Working Papers wp286, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp286
    Note: PRO-1
    as

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    File URL: https://www.jbs.cam.ac.uk/cbrwp286/
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    References listed on IDEAS

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    1. 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.
    2. Xiaolan Fu, 2004. "Exports, Foreign Direct Investment and Economic Development in China," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-51483-6.
    3. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    4. Xiaolan Fu & V. N. Balasubramanyam, 2003. "Township and Village Enterprises in China," Journal of Development Studies, Taylor & Francis Journals, vol. 39(4), pages 27-46.
    5. Nicholas Kaldor, 1975. "What is Wrong with Economic Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 89(3), pages 347-357.
    6. Fan Gang & Mariarosa Lunati & David O’Connor, 1998. "Labour Market Aspects of State Enterprise Reform in China," OECD Development Centre Working Papers 141, OECD Publishing.
    7. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    8. 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.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Tran Nhuan KIEN & Yoon HEO, 2009. "Impacts Of Trade Liberalization On Employment In Vietnam: A System Generalized Method Of Moments Estimation," The Developing Economies, Institute of Developing Economies, vol. 47(1), pages 81-103, March.
    2. Nur Feriyanto, 2012. "Employment effect of Indonesia’s non-oil export," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 4(2), pages 211-221, April.
    3. Ayoki, Milton, 2020. "The employment effects of trade policy reform in Myanmar," MPRA Paper 98090, University Library of Munich, Germany.

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    More about this item

    Keywords

    exports; foreign direct investment; small and medium-enterprises; employment;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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