Wage-size Effect

In this paper, the author examined the"wage-size effect"which is prevalent in many countries testified by a great deal of empirical studies, using a set of data from the National Bureau of Statistics. The result is a little different from previous studies that the relationship between wage and firm size is U-shaped, instead of the famous"wage-size premium"in other countries. Further studies found that this special"U-shaped"relationship was due to companies'various ability to pay as well as capital intensity. After controlling these two variables,"wage-size premium"became significant and more similar with that in other countries. Moreover, the author found that neither technology nor ownership can explain the rest"wage-size effect"in China, which is a puzzle.