Minimum Wage And Performance Of Export Enterprises

The promulgation of the minimum wage regulation in 2004 promoted the establishment and implementation of China's minimum wage system nationwide.In recent years,the minimum wage standards in various regions of China have been constantly raised,showing the characteristics of large scale,high frequency,and substantial increase.According to the website of the Ministry of Human Resources and Social Security of the People's Republic of China,the annual increase in the national minimum wage reached 11 percent during the 13th Five-year Plan period.While the legitimate rights and interests of workers are protected,the labor costs of Chinese enterprises are also gradually rising.The higher labor costs resulting from the minimum wage adjustment will affect the performance of Chinese exporters.Based on the background of substantial adjustment of minimum wage standard in China in recent years,and based on the framework of the trade theory of heterogeneous enterprise,this paper explores the impact of dynamic adjustment of minimum wage standard on the performance of Chinese export enterprises and its mechanism.It is not only a theoretical problem that the academic circle needs to discuss in depth,but also a practical problem that the local governments must consider when setting the minimum wage standard in the future.This paper intends to conduct research on a series of issues concerning "the effect of dynamic adjustment of minimum wage standards on the performance of Chinese export enterprises and its mechanism".In terms of theoretical analysis,based on the trade theoretical framework of heterogeneous enterprises,this paper intends to introduce the minimum wage to reveal the mechanism of dynamic adjustment of the minimum wage standard on the performance of export enterprises.Overall,the dynamic adjustment of the minimum wage standard has two important economic effects on the performance of export enterprises:the first is the "cost pulled effec".The increase of the minimum wage standard will raise the average wage level of export enterprises,thus pushing up the production cost of intermediate products and final products and squeezing their profits,thus having a negative impact on the performance of export enterprises.The second is the "factor substitution effect".The increase of the minimum wage standard will"force" export enterprises to increase input of capital and technical factors to replace the input of labor factors.Specifically,when the fixed capital factor input increases,it will promote its productivity.When the input of human capital factors increases,it will promote the improvement of human capital level.When the input of technology factors increases,it will promote the ability of innovation,and then have a positive impact on the performance of export enterprises.Finally,the impact of the minimum wage increase on the performance of export enterprises depends on the net effect of the above two economic effects.In terms of empirical test,this article through the manual to find the minimum wage standard data collecting parts,merging China Industrial Enterprise Database and Customs Trade Database.Thinking of the minimum wage regulations enacted in 2004 as a "natural experiment",we construct a difference in difference model to examine the impact of the minimum wage standard dynamic adjustment effect on the performance of Chinese export enterprises and its mechanism.This paper attempts to carry out theoretical analysis and empirical test from the perspectives of firms' margins,technological sophistication,markups and domestic value added rate in export.Furthermore,the key factors influencing the effect of policy adjustment are identified to expand and supplement the research on this subject.In summary,in the sample period examined in this paper,the "cost pulled effect" of the minimum wage standard increase is larger than the "factor substitution effect",which significantly inhibits the improvement of the performance of Chinese export enterprises.The relevant conclusions of this paper are as follows:(1)the increase of minimum wage significantly inhibits the margins of export of labor-intensive enterprises in China,but promotes the margins of export of capital-intensive and technology-intensive enterprises.As a result of the "factor substitution effect",the increase of minimum wage "forces" enterprises to improve their capabilities of innovation and levels of total factor productivity,thus driving up the margins of exports of capital-intensive and technology-intensive enterprises.For the margins of export of multi-product enterprises,minimum wage significantly stimulates types of products in export,but reduces the number of destinations and the coverage rate of enterprises and the average value of product-destination in export.The overall effect is to reduce the total export value of enterprises.(2)the increase of minimum wage mainly forces export enterprises to improve their innovation capacity and human capital level to promote the technological complexity of export.In addition,this paper also finds that market reconfiguration in export effect is an important influence channel for the increase of minimum wage "forcing" the industry to improve the overall export technological sophistication.(3)the "cost pulled effect" caused by the increase of minimum wage is greater than the "factor substitution",which finally inhibits the markups of export enterprises.In addition,the estimation results using multiple indexes of the dispersion of markups show that the increase of minimum wage significantly reduces the dispersion of markups of enterprises in the industry,thus improving the resource mismatch.(4)the increase of minimum wage mainly inhibits the domestic value added rate in export through the two channels of "cost pulled effect" and "relative price effect",and the former has a greater inhibitory effect.In addition,this paper also finds that the resource reallocation effect is an important way for the increase of minimum wage to restrain the domestic value added rate in export.The results of this paper show that only when the minimum wage standard is reasonably established can the dynamic adjustment of the minimum wage standard effectively exert its"forcing" effect on the performance of Chinese export enterprises,so as to enhance the trade competitiveness of enterprises,promote the high-quality development of export trade and accelerate the upgrading of export trade.