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Exporting Like China: Productivity, Market Demand, and Labor Frictions

Principal Investigator(s):  View help for Principal Investigator(s) Russell Cooper, China Economic Research Institute, Liaoning University and Department of Economics, European University Institute; Guan Gong, School of Economics, Shanghai University of Finance and Economics, Key Laboratory of Mathematical Economics (SUFE), Ministry of Education; Guanliang Hu, Department of Economics and Finance, City University of Hong Kong; Ping Yan, China Economic Research Institute, Liaoning University

Version:  View help for Version V1

Name File Type Size Last Modified
  ReplicationCodes 11/05/2025 12:10:AM

Project Citation: 

Cooper, Russell, Gong, Guan, Hu, Guanliang, and Yan, Ping. Exporting Like China: Productivity, Market Demand, and Labor Frictions. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2025-11-05. https://doi.org/10.3886/E239688V1

Project Description

Summary:  View help for Summary
This paper studies the determinants of firms’ export status, with particular emphasis on the dif- ferences between Chinese state-controlled enterprises (SCE) and private-controlled enterprises (PCE). We construct a dynamic model of firms’ export decisions that incorporates labor adjustment costs, productivity shocks, market demands, and trade frictions. The model is estimated using data for both ownership types to analyze the factors influencing their export status. The estimated models align with the observed exporting patterns in China, which are characterized by distinctive differences between PCE and SCE. These differences include the productivity gap between exporters and non-exporters, the interaction between domestic and foreign sales, the skewed distribution of export shares, and the dynamic response of employment to changes in export status. Our analysis highlights the crucial role of demand shocks and labor adjustment costs in shaping the dynamics of export status, especially for PCE. A main finding is that the export decisions of PCE are more responsive to demand, while the export status of SCE is more dependent on productivity.
Funding Sources:  View help for Funding Sources National Social Science Foundation of China ; National Science Foundation of China grants; Research Grants Council of the Hong Kong Special Administrative Region, China (CityU 21503523); research grants from Liaoning University



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V2 [2025-11-05]

V1 [2025-11-05]

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