Trade Shocks and Firms Hiring Decisions: Evidence from Vacancy Postings of Chinese Firms in the Trade War

Chuan He, Karsten Mau, Mingzhi Xu

Research output: Working paperProfessional

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Abstract

This paper studies the hiring behavior of firms exposed to the recent China-US trade war. Our analysis leverages information from a Chinese online job board and a firm-level measure of tariff exposure obtained from customs transactions data. Firms
that are more exposed to US tariffs on Chinese goods responded by posting fewer job vacancies and offering lower wages. The latter is partly balanced out by increased non-wage compensation. We also find a negative relationship between US-tariff exposure and the educational background required in firms’ job ads. China’s retaliatory tariffs against the US does not appear to have a statistically significant systematic impact on hiring. The paper also reports heterogeneous adjustment patterns across firms of different size, ownership and product mix. Overall, the trade war reveals to have negative impact on firms and job-seekers in China.
Original languageEnglish
Place of PublicationMaastricht
PublisherMaastricht University, Graduate School of Business and Economics
Number of pages70
DOIs
Publication statusPublished - 5 Jan 2021

Publication series

SeriesGSBE Research Memoranda
Number001
ISSN2666-8807

JEL classifications

  • d22 - Firm Behavior: Empirical Analysis
  • f13 - "Trade Policy; International Trade Organizations"
  • f14 - Empirical Studies of Trade
  • j23 - Labor Demand

Keywords

  • trade war
  • tariffs
  • online job vacancies
  • firm recruitment

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