Topic and Abstract:
Managing the Market or Intervening in the Division of Labour — Empirical Evidence from China on Smith’s Theorem
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 DIDs, 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. The research indicates that (1) the increase in the size of the market is the cause of the evolution of the division of labour, while this effect is general. (2) The underlying mechanism for this phenomenon is that the increased division of labour in trade provides opportunities for firms to enter, while the increased dynamism of the market improves the mechanism of survival of the fittest. (3) The increase in market size does not push enterprises to change their business practices to gain market opportunities, and the increase in the internal linkage of enterprises is limited, but the external linkage of enterprises with state-owned and large-scale enterprises continues to be strengthened, so as to increase the access to more resource allocation opportunities. This study provides China’s empirical evidence for Smith’s theorem, as well as a practical basis for understanding China’s construction of a large unified market and fostering entrepreneurship.
Speaker Profile: Zhao Ying
Zhao Ying is an associate professor, master’s tutor and deputy doctoral director at the School of Public Finance and Taxation of ZUEL, and a researcher at the IIDPF, with research interests in public sector economics and development economics. He has been selected for the Hubei Talent Project, Xiangjiang Scholar, Hubei Postdoctoral Talent Tracking and Cultivation Program and Wenlan Young Scholar. He has published papers as independent or first author in China & World Economy, Economic Research Journal (3 papers), China Industrial Economics and Journal of Financial Research, etc. He has presided over more than 10 projects of National Natural Science Foundation of China (3 projects) and Ministry of Education Foundation on Humanities and Social Sciences, etc. He was awarded the first prize of Hubei Excellent Research Achievement Award and the first prize of the 16th Wuhan Social Science Achievement Award. He is an anonymous reviewer for China Economic Review, China & World Economy, Economic Research Journal, China Economic Quarterly, China Industrial Economics and Journal of Financial Research. He also serves as a Correspondence Reviewer for the National Natural Science Foundation of China, and a Reviewer for the Ministry of Science and Technology and the State Administration of Foreign Experts Affairs.
Host: Professor Lu Yuanping
Executive Director of IIDPF
Conference Information
Time: 28 November 2023 (Tuesday), 10:00-12:00
Venue: Conference Room 119, Wenqin Building