Globalization and the labor share in China: Firm‐level evidence
Chih‐Hai Yang and
Manchester School, 2021, vol. 89, issue 1, 1-23
This study examines the relationship between economic globalization (measured by exports and foreign direct investment) and the labor share in China's manufacturing sector. Using a large firm‐level panel dataset for 2001–2007, we find that the labor shares are significantly higher in exporting firms and foreign‐invested enterprises (FIEs), where the export status is more important than foreign ownership. The origins of the FDI and export types do matter. The aforementioned positive associations are primarily driven by ordinary exports and FIEs from Hong Kong, Macau, and Taiwan, whereas processing exports exhibit a negative association with the labor share. Our baseline results are about the between‐firm variations within industries. When controlling for firm fixed effects, the labor share remains to be higher for a firm becoming an exporter or increasing export intensity, while the labor share is lower when a firm get a foreign investor or increase their exports. Finally, total factor productivity and innovation are negatively correlated with the labor share, suggesting that technological progress may play a role in the decline of the labor share in China.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:manchs:v:89:y:2021:i:1:p:1-23
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1463-6786
Access Statistics for this article
Manchester School is currently edited by Keith Blackburn
More articles in Manchester School from University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().