Research on wage distortion in R&D and innovation activities —— Evidence from China's listed manufacturing enterprises

Yijiu Ding, Bo Li, Dahai Lan, Chunrong Yu and Xueqing Zhang

International Review of Economics & Finance, 2025, vol. 102, issue C

Abstract: Under the dual emphasis on the innovation-driven development strategy and the goal of common prosperity, scientifically evaluating wage distortion in R&D and innovation activities (WD-RDIA) is of critical importance for improving income distribution mechanisms, enhancing innovation efficiency, and strengthening national core competitiveness. This study utilizes data from China's listed manufacturing enterprises from 2018 to 2023, and applies a measurement method under conditions of imperfect competition to investigate WD-RDIA. The findings are as follows: First, WD-RDIA is widespread among China's manufacturing enterprises, and exceeding the average wage distortion across the entire production and operation process. Second, WD-RDIA exhibits notable heterogeneity. Regarding ownership structure, WD-RDIA is most pronounced in privately-owned enterprises, followed by foreign-funded enterprises, with state-owned enterprises experiencing relatively lower levels. From industry characters perspective, WD-RDIA is most severe in capital-intensive enterprises, while it is relatively weaker in labor-intensive and technology-intensive enterprises, both of which are less affected than capital-intensive industries. Third, employment pressure has amplified enterprises' bargaining power in wage decision-making processes, serving as an important driver of WD-RDIA.

Keywords: R&D and innovation activities; Wage distortion; C-D production function; Stochastic frontier analysis; Double machine learning (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:102:y:2025:i:c:s1059056025005052

DOI: 10.1016/j.iref.2025.104342

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