The Impact Of Labor Costs On Export Trade Scale

Export trade is the top troika of Jiangsu economic growth,and the comparative advantage of labor cost is the internal drive element of export trade.With the rapid development of economy,the labor supply and demand are changing,finite supply of labor,the characteristics of a typical dual economy is eliminated,the rising labor cost is tangible.So,the past methods of production which excessive rely on labor inputs has been more and more useless under hen contribution of diminishing marginal returns,the first wave of development bonuses has overdrawn based on join the global value chain with low factors and export-oriented strategy.To this,the scholar thinks,the rising of current labor costs is the erosion of the comparative advantages of export trade in Jiangsu province,will endanger the export enterprise’s international competitiveness,leading to the loss of comparative advantage in the export trade in Jiangsu,make them fall into the predicament of the trade scale atrophy.Other scholars believe that rising labor costs is the predicament of the trade scale atrophy.Other scholars believe that rising labor costs is the natural result of production factor endowments change,this change will increase the export trade competitiveness in the long-term with promote the transformation of trade growth mode,promote the sustainable development of the trade in Jiangsu province.Through the argument,we must ask:whether the rising labor costs inhibit the size of the export trade in Jiangsu?What is labor costs influence on export trade scale mechanism?How much influence on the export trade scale?Whether there is any different effects between different industry?Through the review of exiting theory and combing the domestic and foreign scholars for the study of the issues,The paper pointed out that scholars have a lot of beneficial exploration about rising labor costs on the effect of export trade scale effect,but there are still have some shortcomings,mainly embodied in the mechanism of labor costs on the effect of export trade scale effect is single,lack of study deeply on the mechanisms.In addition,there are few studies on the impact of rising labor costs on different sectors of the industry by distinguishing the sectors.The author based on previous studies,combined with understanding,building the effect of cost,the effect of efficiency wage,the effect of local market,the effect of selecting,the effect of innovation and relevant mechanism.We offer two hypotheses:the first one is the effect of labor cost to export trade depends on the outcome influenced by positive and negative aspects;the second one is the rising labor costs has different effects on thedifferent element intensive industry export trade.The using manufacturing industry’s panel data of Jiangsu province in 2004-2014,through the empirical analysis of hypothesis test,in the case of controlling FDI,industry scale,real effective exchange rate and other variables,the results show that: firstly,the rising labor costs has the positive impact on the export trade scale,but these effects are very limited,compare the positive and negative effects,the rising labor costs has the negative impact on the Jiangsu export trade scale;secondly,for different industries has different effects,rising labor costs has the largest significant impact on the labor intensive industry export trade scale,has the less significant impact on the capital intensive industry export trade scale,has the least significant impact on the technology intensive industry export trade scale.For this reason,the author explain the related empirical results.We put forward the corresponding policy recommendations to dissolve the negative effects that the rising labor costs impact on the Jiangsu export trade scale,including the following three parts:the first one is improving the reform of household registration system to increase the labor supply;the second one is improving the quality of labor force to increase the human capital accumulation;the third one is improving the efficiency of production and allocation to improve the total factor productivity.