Study On Employment Protection Legislation And Export Comparative Advantage From The Perspective Of Law And Economics

Since China’s accession to the WTO in 2001,China’s import and export trade has been rapid growth.In 2013,China’s total import and export value exceeded 4 trillion for the first time to become the world’s largest trading country,the total import and export of goods and total exports ranked first,the same year,China’s economic structure has undergone a major historical change,the third industrial proportion for the first time exceeded the secondary industry ratio;by 2014 years,China’s total imports and exports continue to grow and remain first in the world;in 2015,while China’s economic growth slowed and entered the "new normal" of the economy,it was the first in three consecutive years of global trade in goods.China’s exports have been mainly labor-intensive products,and China’s export comparative advantage due to the current rising labor costs,gradually weakened,the traditional cheap labor formed by the export comparative advantage will be unsustainable.In this case,how to find a new export comparative advantage to maintain the stable and healthy growth of China’s economy appears to be particularly important.At present,the international trade situation has undergone major changes,and the traditional cost comparative advantage has been gradually weakened,how to rely on the institutional level of reform and innovation to explore the comparative advantage of the system,while continuing to adhere to the traditional cost comparative advantage,thus promoting China’s export growth,has become an important breakthrough in the construction of China’s new export comparative advantage.Starting from the angle of legal system,employment protection legislation,this paper discusses the influence of employment protection legislation on the comparative advantage of a country’s export trade.This paper uses the UN COMTRADE,Gwartney database,PWT9.0 database and NBERCES Manufacturing in the 2000 to 2012 Database’s data and the matching data of Chinese enterprise database and China customs from 2000 to 2006,and the panel regression analysis is carried out from two dimensions at the national level and enterprise level,mainly using the methods of fixed effect regression,tool variable,classification analysis and so on.This paper discusses the influence of employment protection legislation on the new sources of comparative advantage of international trade from the perspective of the intersection of law and economics on two dimensions at the national level and at the enterprise level.First,from the analysis of national dimensions,through the application of various industrial export data from all over the world,empirical test of the impact of employment protection on the comparative advantage of exports and trade in a certain industry,and on this basis,empirically test the impact of the level of employment protection legislation on a country’s overall export comparative advantage;Second,from the perspective of enterprises to analyze,through the application of the data of Industrial enterprise database and Customs database,this paper empirically examines the influence of the level of employment protection legislation on the export of Chinese enterprises in the destination country,and analyzes the influence of employment protection legislation on the comparative advantage of a country’s exports from an indirect point of view.The results show that:(1)from the macroscopic level,a country’s employment protection level in an industry will indeed form a country’s export comparative advantage,the higher the flexibility of a country’s labor market,means that the smaller the mobility barrier of labor force,the more flexible the employability,the more obvious its export comparative advantage.After using the first-order lag to deal with endogenous problems in this paper,the results of the text are still robust.On the other hand,in the process of analysis from the overall national level,this paper also found that when a country’s economic development level is higher,the higher the flexibility of its labor market,the more obvious its export comparative advantage.From the results of further regression,it can be seen that the level of employment protection legislation in a country will indeed affect its export comparative advantage,in addition,when the higher the level of human capital in an industry,the more flexible its labor market system,the more obvious its export comparative advantage,And labour market flexibility does not create a clear export comparative advantage in capital-intensive industries.From the return results of developed and developing countries,the higher the level of economic development of a country,the more flexible its labor market system,the more conducive to the formation of export comparative advantage.Labour market flexibility in both developed and developing countries does not affect their export comparative advantage in capital-intensive industries.In industries with high human capital,the more flexible the labour market system in developed countries,the more obvious the comparative advantage of their exports,while in developing countries,the greater the flexibility of the labour market in the sectors with high human capital,does not affect the export comparative advantage of developing countries.(2)data analysis from the micro-enterprise level shows that the more flexible the level of employment protection in the destination country,the more it will have a negative impact on the export of Chinese enterprises,when the higher the labor market flexibility of export destination countries,the more difficult it is for Chinese enterprises to export to them.Event that chose to export to countries with strict employment protection legislation,the more stringent the employment protection legislation of a country,the greater the friction in the labor market,the greater the likelihood of importing products from other countries.If a country’s employment protection legislation is more lenient,its labour market has more flexibility and is given a comparative advantage in international trade through the flexibility of the labour market system.After dealing with endogenous problems in this paper,the results are still robust.In addition,in the analysis of enterprise heterogeneity,it is found that from the point of view of enterprise ownership,the influence of Hong Kong,Macao and foreign enterprises on the level of employment protection in the destination country is more obvious when exporting,while state-owned enterprises,collective enterprises,private enterprises and other types of enterprises are not obviously affected by the level of employment protection in the destination From the point of view of the export intensity of enterprises,for enterprises with low export intensity,the higher the flexibility of the labour market system in the country of export destination,the greater the adverse impact on their exports.From the results of the regression in the east,middle and west,it can be seen that for enterprises in the eastern region,the higher the flexibility of the labour market in the countries of export destination,the looser the system of employment protection etiquette,the greater the adverse impact on the export of enterprises in the eastern region,the limited impact on enterprises in the central and western regions.The main contributions of this paper:(1)This paper not only empirically studies the influence of the home country employment legislation protection system on the home country export,but also examines the influence of the employment legislation protection system of other countries on the export of Chinese enterprises.From the macroscopic level,this paper incorporates the employment protection legislative system and the industry characteristic variables into the macroscopic data test model,examines the influence of the employment legislation protection system at the national level on the export trade of the industry from the empirical point of view,and reveals how the matching effect between the protection of employment legislation and the characteristics of the industry affects a country’s export comparative advantage.From the micro level,this paper examines the influence of the employment protection legislation system of the target country on the export of Chinese enterprises by using the Chinese Industrial enterprise database and the Customs database matching in 2000-2006,and further examines the influence on the heterogeneous enterprises,The aim is to explore the different demands of different types of enterprises on the legislative system of employment protection.(2)This paper examines the difference of the influence of the employment protection legislation system in the target country on the heterogeneous enterprises in China,and by examining the different reactions of enterprises in different export intensity,enterprises of different ownership and different regions in the east,central and west to the intensity of employment protection legislation in the target country,on this basis for China’s enterprises to expand exports to choose the appropriate export destination countries to provide the corresponding policy reference.There are some shortcomings in this paper:(1)There are few related researches on this field,and few subheadings discuss the influence of employment protection legislation on the comparative advantage of international trade from the microcosmic and macroscopic two angles,so this paper still needs to make further analysis on the analysis of this paper.(2)in the macroscopic empirical test,due to the lack of HS coding and USSIC Direct correspondence table,this paper uses Shengbin(2002)Industry code to analyze the global data,and did not really match the US SIC and HS code strictly,the industry code is two-bit industry code,so the results of the study may be biased.(3)In the microscopic analysis,this paper validates the conclusion of this paper from the side,applies the data and customs data from Chinese industrial enterprises,studies the influence of employment protection legislation on China’s export,and does not directly analyze the influence of the level of employment protection legislation on the comparative advantage of the export of a country’s enterprises by using the data of various countries ’ enterprises.It’s just from the side.Through the confirmation of employment protection The Legislative Council has a negative impact on a country’s exports indirectly confirms the impact on the country’s comparative advantage.(4)In view of the measurement of employment protection legislation,there are different measures of measurement,this paper only uses the International Labor Organization on Employment Protection Legislation Database Employment protection Legislation Database inside the Labor regulation as a measure,no other employment protection legislative indicators have been used for robustness testing,future research needs to look for other effective measurement indicators on the robustness test,which makes the results of the research more credible.