Minimum Wage Standard And Chinese Manufacturing Enterprises' Outward Foreign Direct Investment

Since opening to the outside world,cheap labor has been one of the important comparative advantages of Chinese manufacturing industry in international economic competition.However,in recent years,the rising of the minimum wage standard has significantly pushed up the price of labor factors,which may lead to the disappearance of the labor cost advantage of manufacturing industry,and force manufacturing enterprises to transfer to other countries or regions.Therefore,this paper aims to investigate the impact of the rise of the minimum wage standard on the OFDI behavior of manufacturing industry.First of all,based on the summary of the classic research theories and the latest achievements of scholars at home and abroad,this paper takes the free capital model as the prototype,innovatively incorporates the minimum wage standard into it,and establishes the theoretical model of consumer behavior,producer behavior and enterprise OFDI choice,and obtains the relevant conclusion:the rise of the minimum wage standard in the home country increases the possibility of enterprise OFDI Therefore,it provides a theoretical basis for the following empirical test.Secondly,by matching the minimum wage of each city,the database of Chinese industrial enterprises and the directory of overseas investment enterprises(Institutions),this paper describes the typical facts of the minimum wage level and the manufacturing enterprise OFDI.The results show that with the continuous implementation of the minimum wage and the sharp rise of the minimum wage standard,the number of OFDI,the number of OFDI enterprises and the amount of OFDI are in the sample range All of them have achieved remarkable growth;in OFDI enterprises,the eastern region with higher minimum wage standards accounts for a relatively high proportion,the proportion of export enterprises far exceeds that of non export enterprises,the proportion of labor-intensive enterprises far exceeds that of non labor-intensive enterprises,and the number of private enterprises far exceeds that of foreign capital and state-owned enterprises.Thirdly,this paper constructs a fixed effect binary selection model to test the theoretical hypothesis.The result shows that the rising of the minimum wage standard significantly improves the possibility of OFDI of manufacturing enterprises,and the result is very stable;the heterogeneity grouping test further shows that the minimum wage standard plays a stronger role in promoting OFDI of export enterprises,enterprises in the eastern region,private enterprises and labor-intensive enterprises.Fourthly,this paper establishes an intermediary effect model to further investigate the impact mechanism of minimum wage on OFDI.The empirical results show that average wage,per capita capital and productivity play a part of intermediary role as influence channels,that is to say,the positive impact of minimum wage adjustment on OFDI is realized by affecting average wage,per capita capital and productivity of enterprises,among which the intermediary effects of average wage,per capita capital and productivity account for 13%,21%and 10%respectively.Finally,on the basis of the conclusion of this paper,the corresponding countermeasures and suggestions are put forward from the perspective of enterprise,industry and government,in order to benefit the decision-making of OFDI in manufacturing industry.