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Higher education expansion and domestic value added in exports: Theory and evidence from China

Author

Listed:
  • Du, Yan
  • Yan, Jie
  • Cao, Fangzhou
  • Li, Yifei
  • Zhou, Mao

Abstract

This paper analyzes the impact of China’s higher education expansion on domestic value added in exports. To be specific, we firstly construct a nested CES production function model, with import inputs being complementary to skilled labors, and substitutable to unskilled labors. By exploiting China’s higher education expansion as a quasi-natural experiment, this paper accurately examines the causal effect of the human capital expansion on the domestic value-added in exports. The results show that human capital expansion has negative effects on the domestic value-added in exports, and this result is driven by import inputs increase and processing trade engagement. We also find that the effect is more prominent for processing trade, foreign-invested firms, high-tech firms and disciplines of science and engineering.

Suggested Citation

  • Du, Yan & Yan, Jie & Cao, Fangzhou & Li, Yifei & Zhou, Mao, 2023. "Higher education expansion and domestic value added in exports: Theory and evidence from China," Journal of Asian Economics, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:asieco:v:87:y:2023:i:c:s1049007823000416
    DOI: 10.1016/j.asieco.2023.101621
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    More about this item

    Keywords

    Human capital; Higher education expansion; Domestic value-added rate;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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