The Effect and Mechanism of Trade Liberalization on Wage

This research discussed the relationship and mechanism between trade liberalization and the wage level of enterprises. Using the firm-level data from Annual Survey of Industrial Firms(ASIF) database and tariff data from World Bank, we find that, the final goods trade liberalization will reduce the wage, while the intermediate goods trade liberalization will improve the level of enterprises' wages. And that trade liberalization affects wages through firm performance. The reduction of input tariff reduces firm’s input cost, and increases firm’s sales and profit, then the firm has more ability to provide higher wages. While the decline of output tariff damages firm’s performance, which leads enterprises to transfer the loss by reducing wages.

Economic Integration and Network Trade: A Comparison of East Asia and the European Union

The emergence of production networks has changed the structure of international trade, which is characterized by a large share of intra-regional trade flows and a rising value of intermediate goods trade or network trade between countries within the same region. This paper investigates the change in impact of trade determinants with the formation of regional production networks. At the global level, the results show that intermediate goods exports are more sensitive to trade barriers than total goods exports. At the regional level, the comparison reveals that, despite the efforts directed toward export market diversification in East Asia, the region is still more dependent on other regions’ economic conditions than the European Union is.