Education Structure Of Chinese Labor Force And Manufacturing Firm Export

Since 2008,export in our country faces severe domestic constraints as well as severe foreign challenges.To reestablish our export advantage,especially manufacturing industry’s export advantage,we need to increase its productivity,realize the transformation and upgrading of manufacturing industry and give new content for “Made in China”.Just for this purpose,the State Council promulgate "made in China 2025" plan in 2015,take people as foundation of all production and rely on human capital of enterprise to promote its development.Both theoretical and empirical analysis have already proved that human capital accumulation could promote macroeconomic development,but we still don’t know what is the role of human capital on production and export in micro firm level.The quality of staff and ability of top manager are two aspects to measure firm’s human capital.With better educated staff and top manager,a firm can have higher quality staff and more capable top manager,thus the level of its human capital is higher.So in micro level,what is the influence of better educated staff and top manager(together can be labelled as labor force education)on production and export of manufacturing firm? How to improve labor force education structure to realize our powerful manufacturing goal? To answer these questions,this paper analyzes from theoretical and empirical aspects.The third chapter is the theoretical basis of this paper.To associate optimal family expenditure model that reflects its education decision with heterogeneous firm production model,this paper establish a static heterogeneous firm export model in an open economy.Under the assumption that all the countries are equal in every aspect,I deduct two important propositions:(1)the higher the company’s human capital in a country,the higher the average productivity of surviving firms in its market,and the higher the export competitiveness of firms in that country(proposition 4);(2)the greater the number of children parent want in a country,the lower the average productivity of surviving firms and export competitiveness in that country.But if parents pay more attention to children’s education,or spend more time in raising children,or women have better pay relative to men,it still can have higher average productivity of surviving firms and export competitiveness in that country(proposition 5).Under heterogeneous national conditions,the model cannot derive explicit solutions and the role of human capital is not clear.Thus the two propositions this paper gets need to be further verified through empirical tests and numerical simulations.Using data from World Bank’s 2005 China Investment Climate Survey,Chapter four,five,and six conducts some empirical tests.It measures firm human capital in terms of employees’ quality and top manager’s competency: with better educated staff and top manager,a firm can have higher quality staff and more capable top manager,thus the level of its human capital is higher.This paper analyzes the role of employee education(on behalf of the quality of employees)and top manager education(on behalf of senior management capabilities)from the aspects of business productivity,export participation,and export growth,and find:(1)Improvement of top manager’s education or staff education can both promote the growth of total factor productivity in Chinese manufacturing firms.The proportion of employees with tertiary education has a greater effect than the proportion of employees with high school on the productivity of manufacturing firms.(2)The participation of Chinese firms in exports is mainly influenced by top manager.Promotion of top manager’s education has significantly increased the probability that firm exports,and we can conclude that it is a causal relationship,but employees’ education does not affect export decisions of firms.Top managers’ appointment by government reduced the probability of a firm that exports,but the greater the autonomy of top manager,the higher the proportion of peasant workers,the higher the probability a firm exports.(3)The use of low-skilled or low-educated employees contributes to the growth of firm’s exports.The increase in the proportion of low-skilled peasant workers or increase in the proportion of high-school education employees can significantly promote the growth of Chinese firms’ exports.Same as Liu and Zhang(2009),this paper finds incensement in the proportion of employees from tertiary school or above does not influence firms’ export growth.Regardless of whether export competitiveness is measured by export participation or export growth,this paper proves that proposition 4 is correct,that is,the higher the company’s human capital in a country,the higher the average productivity of surviving firms in its market,and the higher the export competitiveness of firms in that country.In addition,according to the ownership of the firm,this paper performs three sample tests:1.State-owned enterprise.Although Promotion of top manager’s education or staff education from tertiary school or above can boost productivity growth of state-owned firms,it does not have significant effect on export participation or export growth.Same as Yang and Li(2013),this paper finds that productivity of state-owned firms is higher with more foreign investment.Foreign investment can also increase its export participation and export growth.Firms with bigger scale or higher capital intensity have higher productivity and export competitiveness,but top manager’s appointment intervention by government reduces state-owned firm’s export participation.Increasing top manager’s autonomy in production,investment,and personnel can partly offset the effects of government intervention.2.Private enterprise.(1)Promotion of top manager’s education or employees’ education can boost private firms’ productivity growth.Increasing the proportion of employees from tertiary school or above has a bigger effect on firm’s productivity than the proportion from high school.Increasing the proportion of employees from tertiary school or above can also increase the probability private firm exports,but this effect is less than the promotion effect from top manager.(2)Private firms with bigger scale will have higher productivity and export competitiveness.The effect of appointment from government on export participation does not significant,which is different from that of state-owned firms,but increasing the autonomy of top manager can also increase export participation rate,which is the same as state-owned firms.(3)Top manager’s role on private firm’s export participation can be influenced by manager’s working year,ecommerce and external financing constraints.Relaxation of external financing constraints can promote private firm’s export participation rate,but increase in interest payments after relaxation can limit the promotion of top manager’s education on export participation.(4)Increasing the proportion of peasant workers can boost export growth of private firms,but this promotion will decrease as peasant workers increase.In addition,interaction tests show that the longer the firm established,the larger peasant workers’ effect on firm’s export growth,but increase in capital intensity can lower this role.3.Foreign investment enterprise.Foreign investment firms have the highest human capital level and export participation rate among the three types of enterprises,but high export participation does not come from its human capital advantage.Top manager’s education and staff education are significantly higher in foreign investment firms without export than exporting ones.Moreover,foreign investment firms with export use higher proportions of temporary workers and peasant workers.This shows that the aim of foreign investment firms entering China is to use our cheap labor force and other resources,assembling products for re-export to other countriesChapter seven expands the static model in Chapter three into dynamics.The dynamic model and the static model maintain the same modeling ideas,and the main conclusions are the same.The two are essentially unified.By numerical simulation,this paper finds that lowering the preference for children in micro-family,increasing the preference for children’s education,extending the time necessary to raise children or increasing women’s relative wages can increase the average productivity of surviving firms in a country,and also its export competitiveness,therefore proposition five correct.In addition,this paper also finds unified growth among countries(Galor,2012)is not only reflected by declining fertility rate and rapid economic development,but also by unified growth of human capital,productivity,and export competitiveness.Lagging country with lower initial human capital may adopt four strategies to catch up with developed countries: lowering preference for children in micro-family,increasing preference for children’s education,extending time necessary to raise children and increasing women’s relative wages.Chapter eight summarizes the conclusions of theoretical studies and empirical tests and analyzes policy implications for conclusions.To improve the education structure of China’s labor force and promote production and export competitiveness of manufacturing firms,corresponding countermeasures are proposed.