Trade Openness, Biased Technological Change And Factorincome Distribution

Since the reform and opening up, factors of national income distribution pattern has changed with the rapid growth of China’s economy. Especially since the 1990 s, factors of national income distribution gradually has tended to capital, which brought the expansion of resident’s income gap and insufficient domestic demand. So the reasons for the change of our national factor distribution have become the topic of academic circles. As an important factor of factor income share, technological progress has attracts wide attention in recent years. But existing studies pay more attention to technology itself, which ignores technological progress bias. There is no in-depth study on the impact of technological progress bias on factor income share. Also the reason of technological progress bias has not got enough attention. With increasing degree of economic globalization, the degree of trade between countries continues to strengthen. According to customs statistics, In 2013, China’s total import and export reached $41600, growth of 7.6%, and jumped to the world’s largest trading nation, creating the miracle of the history of the world trade. Foreign trade provides a way of learning and imitating foreign advanced technology, which affects the direction of our technological progress. So referring to the relevant literature, we believe that trade openness is the main source of technological progress bias. From the perspective of labor heterogeneity, there are three kinds of factors of production, including physical capital, skilled labor and unskilled labor. On this basis, we study trade openness brings physical capital-biased technical progress, skill-biased technical progress or non skill-biased technical progress, and discuss the effects of biased technical progress in factor income share.First of all, this paper reviews existing research literature on the relationship between trade openness, biased technical progress and national factor income distribution, to find out our breakthrough point. Then through analyzing the properties of several common production function, we find that two-level nested CES production function is more suitable for our research. After that, on the basis of production function we build the theoretical model of factor income share, to analyze the mechanism of biased technical progress caused by trade openness to labor income share relative to capital. Then we build a dynamic panel ivmodelonthebasisofthetheoreticalmodelandusethegmmestimationmethodtoregressontheeconomicdevelopmentdataof31provincesin1997-2012.theresultsshowthattradeopennesssignificantlyinfluencesonbiasedtechnicalprogress,tobethemainreasonofbiasedtechnicalprogress;withtheincreasingdegreeoftradeopenness,physicalcapital-biasedtechnicalprogressandskill-biasedtechnicalappear,whichhavereducedourlaborincomesharerelativetocapital.toensurethereliabilityoftheregressionresults,robustnessofmodelisanalyzedbyusingtheregressionmethodofpointsintime.finally,wehaveputforwardrelevantsuggestion,includingenhancingenterprise’scapacityforindependentinnovationtochangethedirectionofdomestictechnicalprogress,andincreasingtheinvestmentofhumancapitaltoupgradethestructureoflaborendowment.thestudyisconductivetounderstandthedirectionandreasonforourbiasoftechnicalprogress,andtradeopennessonthemechanismofactionoffactorincomeshare,enrichingthecontentsofthetheoryoffactorincomedistribution.