Three essays in international economics

The first paper presents an inter-temporal job search model and argues that both emigration and return of Chinese may be strategically planned as an optimal life-cycle residential location sequence. Particularly, it offers an explanation for two interesting phenomena in the context of Chinese immigration: (1) a substantial increase in both emigrants and returnees; (2) Returnees exhibit varying levels of educational degrees. The model attributes these phenomena to three facts: (1) China has a “dual” labor market with a higher paying modern sector; (2) the benefits of globalization accrue mainly to modern sector workers and; (3) the “information revolution” in US attracts China’s most productive intellectuals. The second and the third papers study the impact of trade variety on regional productivity for China and Canada respectively. The second paper studies the effects of Chinese provincial export variety growth on its technological improvement by applying a monopolistic competition model with endogenous technology. The panel data covers all 31 executive districts of mainland China from 1998 to 2005. The results show that export variety significantly affect productivity growth: it accounts for 44.1% of cross-province TFP differences and 36.6% of within-province TFP growth; a 10% increase in the export variety of all exporting industries leads to a 1.4% productivity increase in China (as a weighted province average). By adding import variety in the empirical model used in the second paper, the third paper consolidates the effects of both import and export variety growth on Canadian productivity. Using balanced provincial data from 1988 to 2006, I find that export variety and import variety respectively account for 10.41% and 1.57% of the variation in Canadian provincial productivity differences, and the net trade variety related effects account for 7.06%. Furthermore, the export and import variety respectively account for 9.92% and 6.95% of within-province productivity growth, and their total effects can account for 17.31%. Evaluated at the sample mean, a 10% increase in all trade varieties leads to a 0.90% increase in Canadian productivity, in which the export variety's contribution is 0.57% and the import variety's is 0.33%.