Trade Openness, Economic Growth and the Vicissitude of Labor-intensive Industries: The Case of China

• Main Authors: Ying Ma, Jing Li, Guansheng Yu, Dongyang Yuan
• Format: Article
• Language: English
• Published: Sciendo 2014-09-01
• Series: International Journal of Management and Economics
• Subjects: trade openness; economic growth; labor‑intensive industries; transformation of outward pattern of economic development; simultaneous‑equations model; var model
• Online Access: https://doi.org/10.1515/ijme-2015-0001

In this paper, we use China’s 1986-2008 data to make an empirical analysis on the interrelationship between trade openness, economic growth and the structural change of labor-intensive industries by using simultaneous equation models and a VAR model. Our empirical study leads to the three conclusions. First, trade openness has accelerated economic growth, though with some negative impact on the development of labor-intensive industries; Second, economic growth has had a positive effect on trade openness, but again negatively impacted the development of labor-intensive industries. Third, the expansion of labor-intensive industries has had negative effects on both trade openness and economic growth.