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Trade exposure of Western Europe to China and Eastern Europe: A spatial econometric analysis of the effects on regional manufacturing employment from 1991-2011

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  • Badinger, Harald
  • Reuter, Wolf Heinrich

Abstract

This study analyzes the effects of increased trade with China and Eastern Europe on manufacturing employment in 1,146 NUTS-3 regions of 17 Western European countries from 1991 to 2011. Building on Autor et al. (2013) we aim at identifying the causal effects of an increase in import and export exposure on regional manufacturing employment, thereby, explicitly accounting for labor and product market spillovers. Overall, our results support previous findings of a negative effect of increased import exposure from China for our sample of Western European countries, whereas spatial spillover effects turn out to be positive, slightly mitigating the quantitative impact without changing results quantitatively. Moreover, our cross-country study highlights the pronounced heterogeneity of the estimated effects of trade exposure on manufacturing employment across countries with respect to the trade balance.

Suggested Citation

  • Badinger, Harald & Reuter, Wolf Heinrich, 2017. "Trade exposure of Western Europe to China and Eastern Europe: A spatial econometric analysis of the effects on regional manufacturing employment from 1991-2011," Working Papers 06/2017, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    • Handle: RePEc:zbw:svrwwp:062017
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    1. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    2. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2014. "The Rise Of The East And The Far East: German Labor Markets And Trade Integration," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1643-1675, December.
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    Cited by:

    1. Rob Euwals & Harro van Heuvelen & Gerdien Meijerink & Jan Möhlmann & Simon Rabaté, 2021. "Increased trade with China and Eastern Europe hardly affects Dutch workers," CPB Discussion Paper 426, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Martin Braml & Gabriel Felbermayr, 2018. "Regionale Ungleichheit in Deutschland und der EU: Was sagen die Daten?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(07), pages 37-49, April.
    3. Braml, Martin & Felbermayr, Gabriel, 2018. "Understanding Free Trade Attitudes: Evidence from Europe," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181591, Verein für Socialpolitik / German Economic Association.
    4. Martin Braml & Gabriel Felbermayr & Lucia Wilbert, 2018. "Exportieren Länder mit Leistungsbilanzüberschüssen Arbeitslosigkeit?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(16), pages 20-25, August.

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    Keywords

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    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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