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Exports, FDI, Growth Of Small Rural Enterprises And Employment In China

Xiaolan Fu and Vudayagiri Balasubramanyam

Working Papers from Centre for Business Research, University of Cambridge

Abstract: This paper analyses the growth of employment in China during the post reform period. It argues that the Chinese experience with export-led growth provides an excellent example of the phenomenon of a vent for surplus productive capacity provided by exports, identified by Adam Smith in the Wealth of Nations and elaborated by Hla Myint. The paper extends the Smith-Myint model of ‘vent-for-surplus’ productive capacity to ‘vent-for-surplus’ resources by allowing foreign investment inflows. The ‘vent-for-surplus’ effect of exports on employment growth is examined in a dynamic labour demand framework for a panel of township and village enterprises (TVEs) in China.

Keywords: exports; foreign direct investment; small and medium-enterprises; employment (search for similar items in EconPapers)
JEL-codes: F16 F21 (search for similar items in EconPapers)
Date: 2004-06
New Economics Papers: this item is included in nep-dev, nep-sea and nep-tra
Note: PRO-1
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