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Export contraction and input switching in an aging China

journal contribution
posted on 2024-04-03, 10:41 authored by Feifei Wu, Peipei Xu, Bo GaoBo Gao, Jing Ma

Whether an aging China is increasingly losing its low-cost export advantages? More importantly, which type of inputs’ dynamics occurs to adapt to the above-mentioned circumstance? Using an instrumental-variable strategy, our empirical analysis finds that population aging leads to a contraction in China’s export share since it causes a shortage of middle-aged workers and thereby higher labor cost. We also show that population aging leads to a substitution of labor with capital, but does not promote technology level in the context of China. Moreover, we document that the substitution of labor with capital occurs mainly in the firms with high productivity, large scale, high capital intensity, low credit constraint, high export intensity and private firms.

Funding

National Social Science Fund of China (Grant No. 21BJL066)

History

School

  • Loughborough Business School

Published in

China Economic Review

Volume

85

Publisher

Elsevier

Version

  • AM (Accepted Manuscript)

Rights holder

© Elsevier Inc.

Publisher statement

This paper was accepted for publication in the journal China Economic Review and the definitive published version is available at https://doi.org/10.1016/j.chieco.2024.102165

Acceptance date

2024-03-29

Publication date

2024-04-04

Copyright date

2024

ISSN

1043-951X

eISSN

1873-7781

Language

  • en

Depositor

Dr Bo Gao. Deposit date: 29 March 2024

Article number

102165

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