Title: Location, Location, Location: How Favorable Industry Shocks Can Be Bad for You

Abstract: The traditional view holds that regions more exposed to favorable industry shocks should have better labor market outcomes. This study challenges this view using data from inland China during its accession to the WTO. Contrary to expectations, greater exposure to positive shocks reduces industry employment and wages, regional employment, and employment rates, with no evidence of crowding out of inland industries. We explain these patterns through a parsimonious model: favorable industry or aggregate shocks induce high-productivity entrepreneurs in disadvantaged regions to invest in advantaged regions to better leverage the shocks, thereby reducing local labor demand. We provide evidence supporting this theory.

Speaker: Chao He, Associate Professor of the China Institute of Economic Research, Liaoning University; holds a doctoral degree in economics from the University of Wisconsin-Madison, USA. He previously served as Assistant Professor at Renmin University of China, Shanghai University of Finance and Economics, and East China Normal University. His research fields include macroeconomics and labor economics, and he has published papers in top field journals such as Journal of Economic Theory, Review of Economic Dynamics, and Journal of Money, Credit and Banking. The courses he teaches include Principles of Macroeconomics, Intermediate Macroeconomics, Money and Banking, Financial Economics, and Statistics. He also won the First Prize in the Young Teachers' Teaching Competition at Shanghai University of Finance and Economics.

Date & time: 11 November 2025, 10:00 - 12:00

Venue: B321, Block B, Zhixin Building, Central Campus, Shandong University