Minimum wage and export: evidence from Chinese firm-level data

Shuang Ma, Churen Sun and Guoqiang Tian

MPRA Paper from University Library of Munich, Germany

Abstract: This paper proposes a two-country trade equilibrium model with heterogeneous firms to investigate the influences of minimum wages and productivity on firms' exports. It shows that the influence of minimum wages on firms' exporting probability and foreign sales is negative while that of firms' productivity on their exports is positive. Econometric analysis based on the Annual Survey of Chinese Industrial Firms as well as the data of minimum wages collected ourselves from 1998 to 2007 verifies these predictions. Holding the other variables constant, if minimum wages and their productivity increase by 100%$, then the elasticity of minimum wage on firms' exporting sales is -8.6% while that of firms' productivity is 75.6%, and firms' exporting possibility decreases by 1.1%$ and increases by 1.6%$, respectively.

Keywords: Minimum wage; heterogeneous firm; productivity; export (search for similar items in EconPapers)
JEL-codes: F12 F16 L25 (search for similar items in EconPapers)
Date: 2011-07-22
New Economics Papers: this item is included in nep-eff, nep-int and nep-tra
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