Firm Response to Competitive Shocks: Evidence from China's Minimum Wage Policy

• 成果类型: Article
• 署名作者: Hau, Harald; Huang, Yi; Wang, Gewei
• 署名单位: University of Geneva; Swiss Finance Institute (SFI); Center for Economic & Policy Research (CEPR); Renmin University of China
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdz058
• 发表日期: 2020
• 页码: 2639-2671
• 关键词: management-practices; PRODUCTIVITY; EMPLOYMENT; OWNERSHIP; inputs

摘要

The large regional variation in minimum wage levels during the period 2002-8 in China implies that Chinese manufacturing firms experienced competitive shocks as a function of firm location and their low-wage employment share. We find that minimum wage hikes accelerate the input substitution from labour to capital, reduce employment growth and accelerate total factor productivity growth-particularly among the less productive firms under private Chinese or foreign ownership, but not among state-owned enterprises. The heterogeneous firm response to labour cost shocks can be explained by differences in management practices and suggests that management quality and competitive pressure are complementary.