MEASURING CHANGES IN COMPETITIVENESS IN CHINESE MANUFACTURING INDUSTRIES ACROSS REGIONS IN 1995-2004:AN UNIT LABOR COST APPROACH

Vivian Chen (), Harry Wu () and Bart van Ark ()
Additional contact information
Vivian Chen: The Conference Board

No 08-03, Economics Program Working Papers from The Conference Board, Economics Program

Abstract: Using an industry-by-region data set, based on China’s Third Industrial Census for 1995 and First Economic Census for 2004, and covering 28 industries and 30 provinces, this paper examines the trend of labor compensation (ALC), labor productivity (ALP) and unit labor cost (ULC) by manufacturing industry across regions (provinces or groups of provinces). At the aggregate level, it shows that productivity growth was generally faster than that of labor compensation and hence resulted in a significant decline in unit labor cost for all regions in China. Furthermore, compared to more developed regions, less developed regions exhibited even stronger productivity growth relative to compensation, thus leading to a convergence across regions over this period. However, we observe a substantial variation in growth rates and convergence trends across regions for individual industries. Logit regression shows that labor intensive industries are more likely to converge in productivity, compensation and unit labor cost while skill intensive industries tend to increase inequality in unit labor cost. This is confirmed by estimating a growth regression, which shows that in provinces characterized by higher skill levels of the labor force, skill intensive industries experienced faster decline in ULC.

Keywords: Labor productivity; average labor compensation; unit labor cost; and regional convergence (search for similar items in EconPapers)
JEL-codes: J30 (search for similar items in EconPapers)
Pages: 43
Date: 2008-06
New Economics Papers: this item is included in nep-cse, nep-dev, nep-eff, nep-geo and nep-tra
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.conference-board.org/economics/workingpapers.cfm?pdf=E-0030-08-WP First version, 2008 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cnf:wpaper:0803

Access Statistics for this paper

More papers in Economics Program Working Papers from The Conference Board, Economics Program Contact information at EDIRC.
Bibliographic data for series maintained by A Ozyildirim ().