Trade Adjustment in Asia

Past Experiences and Lessons Learned

Description :

Asia’s economic success over the past four decades has been built on a strategy of export promotion coupled with trade opening. However, this economic success has been accompanied by structural changes, such as the need for workers to change roles, sectors and sometimes regions. This publication aims to provide new insights into how Asia’s labour markets and firms have adjusted to trade opening.

Poverty rates throughout Asia have fallen dramatically in recent years, especially in countries that have succeeded in integrating into regional or global value chains. Faced with increased foreign competition, firms have been forced to reorganize and quickly adopt new technologies.

Despite the importance of this adjustment process, relatively little empirical evidence exists. This publication aims to address this. Written by leading trade economists with expertise in the region, it shows that trade opening has led to a more efficient allocation of capital and labour. However, this has been accompanied by significant adjustment costs.

The book sheds light on the effects of trade on workers and firms, with the aim of improving understanding of the adjustment process and contributing to the debate on how to make globalization work for all.

Co-published with the Asian Development Bank Institute

October 2020 | 400 pages | 297 x 210 mm | Weight: 0.900 kg

CONTENTS

Introduction
Marc Bacchetta and Matthias Helble

Part I: Overview: Trade Adjustment in Asia
1. Responses to Trade Opening: Evidence and Lessons from Asia 17
Devashish Mitra

Part II: Labor Market Adjustments in Asia
2. Industry Wages and Tariffs of the Rest of the World
Marcelo Olarreaga, Roberta Piermartini, and Guido Porto
3. Trade Liberalization and the Hukou System of the People’s Republic of China: How Migration Frictions Can Amplify the Unequal Gains from Trade
Yuan Zi
4. The Impact of Tariff Liberalization on the Labor Share in India’s Manufacturing Industry
Prachi Gupta and Matthias Helble
5. Export Boom, Employment Bust? The Paradox of Indonesia’s Displaced Workers, 2000–2014
Rashesh Shrestha and Ian Coxhead

Part III: Firm-level Adjustments in Asia
6. Firm Adjustment to Trade Policy Changes in East Asia
Dionisius Narjoko and Shujiro Urata
7. The Rise of the People’s Republic of China and Its Competition Effects on Innovation in Japan
Nobuaki Yamashita and Isamu Yamauchi
8. Trade Reform, Managers, and Skill Intensity: Evidence from India
Pavel Chakraborty
9. Multiproduct Firms, Tariff Liberalization, and Product Churning in Vietnamese Manufacturing
Ha Thi Thanh Doan

Index