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Trade Shocks and Firms Hiring Decisions:

Author

Listed:
  • He, Chuan
  • Mau, Karsten

    (RS: GSBE other - not theme-related research, Macro, International & Labour Economics)

  • Xu, Mingzhi

Abstract

This paper studies the hiring behavior of firms exposed to the recent China-US trade war. Our analysis leverages information from a Chinese online job board and a firm-level measure of tariff exposure obtained from customs transactions data. Firms that are more exposed to US tariffs on Chinese goods responded by posting fewer job vacancies and offering lower wages. The latter is partly balanced out by increased non-wage compensation. We also find a negative relationship between US-tariff exposure and the educational background required in firms’ job ads. China’s retaliatory tariffs against the US does not appear to have a statistically significant systematic impact on hiring. The paper also reports heterogeneous adjustment patterns across firms of different size, ownership and product mix. Overall, the trade war reveals to have negative impact on firms and job-seekers in China.

Suggested Citation

  • He, Chuan & Mau, Karsten & Xu, Mingzhi, 2021. "Trade Shocks and Firms Hiring Decisions:," Research Memorandum 001, Maastricht University, Graduate School of Business and Economics (GSBE).
    • Handle: RePEc:unm:umagsb:2021001
    DOI: 10.26481/umagsb.2021001
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    References listed on IDEAS

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    Cited by:

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    2. Karin Mayr-Dorn & Gaia Narciso & Duc Anh Dang & Hien Phan, 2023. "Trade diversion and labor market adjustment: Vietnam and the U.S.-China trade war," Economics working papers 2023-04, Department of Economics, Johannes Kepler University Linz, Austria.
    3. Liu, Guanchun & Liu, Yuanyuan & Zhang, Chengsi, 2022. "Tax enforcement and corporate employment: Evidence from a quasi-natural experiment in China," China Economic Review, Elsevier, vol. 73(C).
    4. Lastauskas, Povilas & Proškutė, Aurelija & Žaldokas, Alminas, 2023. "How do firms adjust when trade stops?," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 287-307.
    5. Etim O. Frank & E. E. Ubeng, 2021. "Theoretical and Conceptual Issues on Covid-19 Pandemic," Journal of Public Administration and Governance, Macrothink Institute, vol. 11(4), pages 7394-7394, December.
    6. Shouxin Bai & Shicheng Zhou & Yuyao Sheng & Xingwei Wang, 2022. "Does Lockdown Reduce Employment in Major Developing Countries? An Assessment Based on Multiregional Input–Output Model and Scenario Analysis," Sustainability, MDPI, vol. 14(12), pages 1-19, June.
    7. ITO Tadashi, 2022. "The Effects of Trump's Trade War with China on Japan's Trade," Discussion papers 22019, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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