Research On The Influence Of The Minimum Wage Standards On Corporate Innovation

Under the “New Normal” economic background,it has become one of the most urgent issues to find a way to improve our exsiting minimum wage system in order to achieve mass entrepreneurship and innovation.This includes overcoming the constraints and weaknesses that are demetrial to the innovation of enterprises,improving the innovation capability and competitiveness of Chinese enterprises,and pushing the economic restructuring and upgrading.During the 13 th Five-Year Plan,the innovation-driven development of new economic has become the mainstream.Innovation is the source and vitality of economic development,and it is also the key to avoiding being caught in the “middle-income trap” and “transformation trap”.Conducting a reform on the existing minimum wage system to promote the development of corporate innovation is an urgent task for the development of new economy under the “new normal” background.Currently,in this field,most scholars focus on studying the impact of the minimum wage standard on employment effects,price levels,welfare effects,etc.,while giving less attention to the impact of the minimum wage system on corporate innovation.This thesis provides an organized literature review on relevant studies and research on this topic,which summarizes the main ideas and inadequacies of some existing theories.Then it analyzes the related theories on the effects of the minimum wage standards on corporate innovation,and expounds the cost effect,social exchange theory,tournament theory,and human capital effect.Based on the theoretical research,it conducts a thorough analysis on the mechanism of how the minimum wage standard affects corporate innovation.Subsequently,a comparision between the minimum wage for 2,868 towns and districts(2005-2010)and the data from the Chinese industrial enterprise database has been conducted.Thus,based on the theoretical analysis and empirical results,we can find that:(1)the minimum wage standard significantly inhibits the development of corporate innovation.After a series of robustness tests such as controlling patent incentive policies,changing corporate innovation measurement methods,controlling the impact of joining the WTO,and changing estimation methods,this conclusion is still valid;(2)from the perspective of innovation attributes,according to the general patent classification,the increase of the minimum wage has a significant inhibitory effect on different types of patents.Specifically,it influences the utility patent the most,while the negative effect on design patents is the least;(3)due to the heterogeneity of firms,the negative effects of minimum wages on different enterprises are significantly different.In terms of enterprises from different industires,the minimum wage standard has a greater inhibitory effect on the labor-intensive corporate innovation,while the impact on the capital-intensive industry is not obvious.In terms of the location of enterprises,increasing the minimum wage standard would have different impacts on the east,west and middle areas.Specifically,it has the strongest inhibitory effect on corporate located in the middle part,followed by the eastern region,but with no significant impact on corporate in the western region.In terms of the form of ownership for enterprises,the increase of minimum wage standard would have more inhibitory impact on state-owned enterprises rather than on other forms of enterprises.However,it basically has no impact on the innovation of foreign enterprises.In conclusion,this thesis extracts the data from Chinese industrial enterprise database,patent office,and the minimum wage standard from various towns and districts and conducts a comparision to obtain micro data of the large sample.With a comprehensive analysis on the influence of mimum wage standard on corporate innovation,this thesis provides theoretical guidance and policy enlightenment for the development of corporate innovation and transformation.