IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2022i1p344-d1014973.html
   My bibliography  Save this article

The Effects of China’s Participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): A Quantitative Assessment

Author

Listed:
  • Jaewon Jung

    (School of Business and Economics, Dankook University, Yongin 16890, Republic of Korea
    THEMA, CY Cergy Paris University, 95011 Cergy, France
    School of Business and Economics, RWTH Aachen University, 52056 Aachen, Germany)

Abstract

This paper aims to quantify the effects of China’s participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), in particular by focusing on the possible productivity effects through the endogenous assignment of skills to technologies. In this paper, we develop a large-scale global computable general equilibrium (CGE) model in which firms are heterogeneous in technologies and workers are heterogeneous in individual skill levels so that equilibrium skill–technology assignments are endogenously determined. This study contributes to the literature with the new CGE modeling and application to the recent important issue in international trade. By calibrating the model to 23 countries and regions, we quantify the effects of China’s participation in the CPTPP. Due to the positive real productivity effects and the reallocation of workers, the results show that China’s participation in the CPTPP may generate significantly higher productivity, GDP, and welfare effects compared to previous conventional CGE models based on simplistic representative agent frameworks at a given productivity. Globally, on average, the real productivity of the manufacturing sector, the number of exporting firms, real GDP, and welfare increase by 0.52%, 19.62%, 1.36%, and USD 3.41 billion, respectively.

Suggested Citation

  • Jaewon Jung, 2022. "The Effects of China’s Participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): A Quantitative Assessment," Sustainability, MDPI, vol. 15(1), pages 1-13, December.
    • Handle: RePEc:gam:jsusta:v:15:y:2022:i:1:p:344-:d:1014973
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/1/344/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/1/344/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    2. Philipp Harms & Jaewon Jung & Oliver Lorz, 2021. "Offshoring and sequential production chains: A general equilibrium analysis," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(2), pages 623-647, May.
    3. Arnaud Costinot & Jonathan Vogel, 2010. "Matching and Inequality in the World Economy," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 747-786, August.
    4. Pol Antràs & Luis Garicano & Esteban Rossi-Hansberg, 2006. "Offshoring in a Knowledge Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(1), pages 31-77.
    5. Andrew Bernard & Joachim Wagner, 1997. "Exports and success in German manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(1), pages 134-157, March.
    6. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    7. Blanchard, Emily & Willmann, Gerald, 2016. "Trade, education, and the shrinking middle class," Journal of International Economics, Elsevier, vol. 99(C), pages 263-278.
    8. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 903-947.
    9. Peter A. Petri & Michael G. Plummer & Fan Zhai, 2012. "The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 6642, April.
    10. Aw, Bee Yan & Chung, Sukkyun & Roberts, Mark J, 2000. "Productivity and Turnover in the Export Market: Micro-level Evidence from the Republic of Korea and Taiwan (China)," The World Bank Economic Review, World Bank, vol. 14(1), pages 65-90, January.
    11. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    12. Roberts, Mark J & Tybout, James R, 1997. "Producer Turnover and Productivity Growth in Developing Countries," The World Bank Research Observer, World Bank, vol. 12(1), pages 1-18, February.
    13. Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2010. "Inequality and Unemployment in a Global Economy," Econometrica, Econometric Society, vol. 78(4), pages 1239-1283, July.
    14. Xiaonan Sun & Junjie Hong, 2011. "Exports, Ownership and Firm Productivity: Evidence from China," The World Economy, Wiley Blackwell, vol. 34, pages 1199-1215, July.
    15. John Gilbert & Taiji Furusawa & Robert Scollay, 2018. "The economic impact of the Trans†Pacific Partnership: What have we learned from CGE simulation?," The World Economy, Wiley Blackwell, vol. 41(3), pages 831-865, March.
    16. Jaewon Jung, 2020. "Introducing Roy-like worker assignment into computable general equilibrium models," Applied Economics Letters, Taylor & Francis Journals, vol. 27(6), pages 503-510, March.
    17. repec:hrv:faseco:4784031 is not listed on IDEAS
    18. Gene M. Grossman, 2004. "The Distribution of Talent and the Pattern and Consequences of International Trade," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 209-239, February.
    19. Jaewon Jung, 2021. "International Trade and Human Capital Investment with Heterogeneous Firms and Workers: Modeling and Analysis," Mathematics, MDPI, vol. 9(10), pages 1-21, May.
    20. Peter A. Petri & Michael G. Plummer, 2020. "Should China Join the New Trans‐Pacific Partnership?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(2), pages 18-36, March.
    21. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "Trading Tasks: A Simple Theory of Offshoring," American Economic Review, American Economic Association, vol. 98(5), pages 1978-1997, December.
    22. Andrew B. Bernard, 2004. "Exporting and Productivity in the USA," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(3), pages 343-357, Autumn.
    23. Petri, Peter A., 2012. "The Trans-Pacific Partnership and Asia-Pacific Integration," 2012: New Rules of Trade? December 2012, San Diego, California 143184, International Agricultural Trade Research Consortium.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jaewon Jung, 2021. "Economic Transformation and Sustainable Development through Multilateral Free Trade Agreements," Sustainability, MDPI, vol. 13(5), pages 1-17, February.
    2. Jaewon Jung, 2022. "The Nexus between Institutional Quality and Global Market Structure: Export versus FDI," Mathematics, MDPI, vol. 10(24), pages 1-14, December.
    3. Jaewon Jung, 2021. "International Trade and Human Capital Investment with Heterogeneous Firms and Workers: Modeling and Analysis," Mathematics, MDPI, vol. 9(10), pages 1-21, May.
    4. Jaewon Jung, 2020. "Institutional Quality, FDI, and Productivity: A Theoretical Analysis," Sustainability, MDPI, vol. 12(17), pages 1-17, August.
    5. Jaewon Jung, 2019. "Technology, skill, and growth in a global economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 68(3), pages 609-641, October.
    6. Tomasz Serwach, 2012. "Why Learning by Exporting May Not Be As Common As You Think and What It Means for Policy," International Journal of Management, Knowledge and Learning, International School for Social and Business Studies, Celje, Slovenia, vol. 1(2), pages 157-172.
    7. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2018. "Global Firms," Journal of Economic Literature, American Economic Association, vol. 56(2), pages 565-619, June.
    8. Hartmut Egger & Udo Kreickemeier & Jens Wrona, 2017. "Offshoring Domestic Jobs," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 2, pages 27-70, World Scientific Publishing Co. Pte. Ltd..
    9. Vu, Hanh & Doan, Hung, 2016. "Vietnamese footwear export:The direction of trade and determinants of firms’ market penetration," MPRA Paper 75566, University Library of Munich, Germany.
    10. Dai, Mi & Maitra, Madhura & Yu, Miaojie, 2016. "Unexceptional exporter performance in China? The role of processing trade," Journal of Development Economics, Elsevier, vol. 121(C), pages 177-189.
    11. Kölling, Arnd & Mertens, Antje, 2020. "Exporting behavior and the demand for skills in German establishments," Working Papers 97, Berlin School of Economics and Law, Institute of Management Berlin (IMB).
    12. Egger, Hartmut & Kreickemeier, Udo & Moser, Christoph & Wrona, Jens, 2024. "Offshoring and job polarisation between firms," Journal of International Economics, Elsevier, vol. 148(C).
    13. Neil Foster-McGregor, 2012. "Innovation and Technology Transfer across Countries," wiiw Research Reports 380, The Vienna Institute for International Economic Studies, wiiw.
    14. Muendler, Marc-Andreas, 2017. "Trade, technology, and prosperity: An account of evidence from a labor-market perspective," WTO Staff Working Papers ERSD-2017-15, World Trade Organization (WTO), Economic Research and Statistics Division.
    15. Davidson, Carl & Matusz, Steven J., 2012. "A model of globalization and firm-worker matching: How good is good enough?," International Review of Economics & Finance, Elsevier, vol. 23(C), pages 5-15.
    16. Bulent Unel, 2010. "Technology Diffusion through Trade with Heterogeneous Firms," Review of International Economics, Wiley Blackwell, vol. 18(3), pages 465-481, August.
    17. Pol Antràs & Davin Chor, 2021. "Global Value Chains," NBER Working Papers 28549, National Bureau of Economic Research, Inc.
    18. Irene Brambilla & Nicolas Depetris Chauvin & Guido Porto, 2015. "Wage and Employment Gains from Exports: Evidence from Developing Countries," Working Papers 2015-28, CEPII research center.
    19. Sahoo, Pradipta Kumar & Rath, Badri Narayan & Le, Viet, 2022. "Nexus between export, productivity, and competitiveness in the Indian manufacturing sector," Journal of Asian Economics, Elsevier, vol. 79(C).
    20. Tarlok Singh, 2010. "Does International Trade Cause Economic Growth? A Survey," The World Economy, Wiley Blackwell, vol. 33(11), pages 1517-1564, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2022:i:1:p:344-:d:1014973. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.