The 46th Xi Xian Forum, co-hosted by IIDPF and the School of Public Finance and Taxation, was successfully held on 28 November 2023 in Room 119 of Wenqin Building. Associate Professor Zhao Ying from the School of Public Finance and Taxation, as the guest speaker of the forum, gave a keynote speech entitled " Managing the Market or Intervening in the Division of Labour - Empirical Evidence from China on Smith’s Theorem". The academic forum was hosted by Prof Lu Yuanping, Executive Director of IIDPF, with the participation of Professor Wang Jingjing, and Professor Yan Weibo from the School of Public Finance and Taxation, and over thirty faculty members and students, including researchers Dr Wan Qian, and Dr Wanxin from IIDPF.
Whether and to what extent market size can contribute to the evolution of the division of labour are important theoretical and practical questions. Several existing studies prove Smith's theorem mainly in terms of theoretical construction, but lack empirical evidence. With the background that China's accession to the WTO significantly enlarged its market size, Zhao Ying uses the data of daily per-firm entry and equity affiliation from 2000 to 2002 from the General Administration for Industry, Commerce and Administration of China, and through the research design of yearly-monthly DID, he examines how the market size affects the social division of labour and tries to understand the fact of the characteristics of the large number of firms in China and their increasing affiliation, which provides Chinese empirical evidence for Smith's theorem, and also provides a realistic basis for understanding China's construction of a large unified market and the cultivation of entrepreneurship. The research indicates that increasing market size is a general cause of the evolution of the division of labour, and that the increase in market size has led to the strengthening of firms' external linkages with state-owned and large firms as a way of increasing their access to more resource allocation opportunities. Further research reveals that the underlying mechanism for this phenomenon lies in the fact that the increased division of labour in trade provides opportunities for firms to enter, while the increased dynamism of the market improves the functioning of the mechanism of survival of the fittest.
Associate Professor Zhao Ying gave a wonderful speech to the faculty members and students present and at the same time triggered their in-depth thinking. In the discussion session, the attending faculty and students actively interacted regarding the research background, theoretical models and empirical evidence.
