Research On The Impact Path Of The Increase Of Labor Cost On The Technological Progress Of Manufacturing Industry In China

As one of the important symbols to measure China's comprehensive national strength,since the reform and opening up,the manufacturing industry has gained rapid development by the advantages of abundant resources,abundant labor and low labor costs.However,in recent years,China's demographic dividend gradually depleted,labor costs show a rising trend.This rising trend on the manufacturing enterprises is actually a double-edged sword: on the one hand,rising labor costs make the company's production costs increase,the burden of enterprises also increased;the other hand,under the pressure of rising labor costs,to win in the market competition,manufacturing enterprises are supposed to improve production efficiency and promote industrial upgrading.Faced with the current fierce international competitive environment,to realize the transition from the "manufacturing power" to "manufacturing power",it will be necessary to shift from the traditional manufacturing labor-intensive and low value-added production methods to technology-intensive and high value-added development direction,which is inseparable from the level of technological progress.In the face of rising labor costs,how will manufacturing companies choose to cope,in which path will their behaviors impact on the technological progress level? In these paths,the rise in labor costs is to promote or hinder the technological progress of China's manufacturing industry? This article will analyze the above problems.This paper firstly talks about whether labor cost increase would influence on the technological progress.Then based on economic theory and mathematical analysis,the paper expounds the mechanism of the effect of labor cost increase on technological progress from the perspective of corporate behavior,dividing it into a direct impact path and indirect impact paths.Then analyzes the changes in manufacturing industry based on China's data from 2002 to 2014.The KLEMS-MFP index method is used to calculate the MFP of the manufacturing industry to analyze its technological progress.The next step is to verify the causal relation between labor cost and the indirect impact paths by the Granger causality test using the mediating variables.Finally through the establishment of the path analysis model to explore the direct and indirect impact path of labor costs on the technological progress of manufacturing,and draw the corresponding conclusions.The main conclusions of this paper are as follows: From 2002 to 2014,the increase of labor cost has a positive effect on the technological progress of China's manufacturing industry.At the same time,the following conclusions are obtained:(1)The indirect influence path of labor cost in China's manufacturing industry is verified.Firstly,the capital substitution path: the change of labor cost is the Granger reason of per capita fixed assets stock,with a one-way influence and an obvious time lag,which means manufacturing enterprises' choice to increase the fixed assets has hindered manufacturing industry Technical progress in China.Secondly,the technical substitution path: the change of labor costs is also the one-way Granger reason of R & D investment,which means manufacturing enterprises has a certain role in promoting technological progress of manufacturing industry by increasing R&D investment technology.(2)The rising labor costs' impact on the level of technological progress in the manufacturing sector is more obvious.