| Since the 1990 s,the labor share in China has decreased significantly,and at the same time,the scale of firms have show a trend of rapid expansion.As the main participants and contributors of economic activities,the firms provided a large number of jobs.These jobs are the main source of income for most workers.The growth and recession of firms are also bound to affect the wages of workers and their share in the total income.This paper mainly studies the income distribution effect of firm scale expansion,and seeks for ways to improve labor share.At present,the research on the impact of firm scale on labor share is mainly conducted from the perspective of relative scale change,that is,the analysis is conducted on the premise of the increase of industry concentration,which can explain the change of weighted labor share,but can not explain the decline of average labor share.This paper focuses on the analysis of a single firm,and from the micro perspective to studies the impact on the labor share of the absolute scale change of firms,which has great theoretical value and practical significance.Through the analysis of mathematical model,we found that there is a negative correlation between firm scale and labor share,and the more fierce the industry competition,the greater the decline of labor share caused by the expansion of firm scale.The analysis of the impact mechanism shows that in the process of the expansion of firm scale,firms can produce more products due to economies of scale and more financial strength,the expansion of firm scale will also enhance the monopoly ability,enabling the firm to obtain more monopoly price increase and excess profits.The improvement of firm production efficiency and monopoly ability caused by the expansion of firm scale will improve the profit margin of firms,thus reducing the labor share in the firm.This paper mainly uses the 1998-2007 China industrial firm database data measurement analysis.The research results are as follows.Firstly,the expansion of firm scale is an important factor causing the decline of labor share in China.Through the robustness test analysis,this conclusion is established after changing the calculation method of explanatory variables and explained variables,and changing the sample period,and has passed the endogenous test.Secondly,the intensity of firm scale affecting labor share varies under different types of ownership firms,labor intensity,industry competition degree and location.Thirdly,The expansion of firm scale will reduce the labor share through both the efficiency mechanism and the monopoly mechanism,but the efficiency mechanism is dominant.Using the dynamic DOP decomposition,it is found that the decrease in the labor share caused by the average firm scale expansion is due to the improvement of efficiency.However,the relative scale expansion of firms will reduce the labor share through the improvement of efficiency,but less,more due to the efficiency factors such as monopoly.This paper has two policy suggestions: on the one hand,it is necessary to continuously improve market competition,promote the growth of efficient firms,and prevent low-efficiency monopoly behavior,so that the decline of labor share can increase the quality and efficiency of economic growth.On the other hand,we can enhance the bargaining power of workers,encourage firms to establish an employee dividend system,and give full play to the government’s re-distributive role,so that workers can share the profits of firms. |
