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Services Trade and Labor-Demand Elasticities of Service Sector: Empirical Evidence from China

Author(s): Hao Wei | Qiang Fu | Sui Yang

Journal: American Journal of Industrial and Business Management
ISSN 2164-5167

Volume: 02;
Issue: 04;
Start page: 136;
Date: 2012;
Original page

Keywords: Trade Liberalization | Labor-Demand Elasticities | Service Sector | Substitution Effect | Output Effect

This paper analyses the impact of services trade on the labor-demand elasticities of service sector with the data of China from 1982 to 2009.we find that: 1) First, no matter in the long run or in the short term, China’s services export distinctly impacts on the labor-demand elasticities of service sector. In the long-term influence, the substitution effect is much more powerful than the output effect, however, as to the short period, the output effect is a little stronger than the substitution effect; 2) Second, in the long run, we cannot reject the hypothesis of no relationship between service import openness and the labor-demand elasticities of service sector. Whereas, studying the result of the short term, trade liberalization of services import does affect the service sector labor-demand elasticity weakly.
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