Trade Shocks and Firms Hiring Decisions

Chuan He, Karsten Mau and Mingzhi (Jimmy) Xu

No 1, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

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.

JEL-codes: D22 F13 F14 J23 (search for similar items in EconPapers)
Date: 2021-01-05
New Economics Papers: this item is included in nep-bec, nep-cna, nep-int and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2021001

DOI: 10.26481/umagsb.2021001

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