The Impact Of Minimum Wage On Export Domestic Value Added Ratio Of Chinese Enterprises

Guided by the strategy of Reform and Opening,China participates in global production and trade with low labor cost and relatively perfect industrial system.However,with the promulgation of the minimum wage regulation,labor costs of enterprises continue to rise,and export trade relying on demographic dividend is facing great challenges.The impact of minimum wage standard on export trade of Chinese enterprises only through the cost effect is still a topic widely discussed by scholars and the government.This paper studies the impact of minimum wage on DVAR of Chinese enterprises from the perspective of micro enterprises.Firstly,we use two micro data sets in this paper:Chinese customs transaction-level trade data from 2000 to 2007 and the Annual Surveys of Industrial Firms from the National Bureau of Statistics of China over the same period,and the method used by Upward et al.(2013),zhang jie et al.(2013)and Kee and Tang(2016),to estimate the domestic value-added ratio.Secondly,We use the method of Rebecca and Chiara(2017)for reference to take the minimum wage regulation promulgated in 2004 as an exogenous shock and construct a quasi-natural experiment to study the impact of minimum wage standards on the domestic value-added ratio of exports of Chinese enterprises.After empirical analysis,We found that the minimum wage standard has a significant positive impact on the domestic value-added ratio of export trade of Chinese enterprises.In order to further explore the mechanism of the impact of the minimum wage,this paper analyzes the mediating effect based on the four effects proposed by scholars.Result shows that the minimum wage has a negative impact on DVAR mainly through the cost effect,and has a positive impact on DVAR through the efficiency-wage effect and selection effect.Since the mediating effect of positive influence is greater than the negative influence,the minimum wage in overall has a positive impact on the DVAR.In addition,when considering the heterogeneity of enterprises,this paper finds that compared with capital intensive enterprises,the minimum wage has a greater positive impact on the export domestic value added ratio of labor intensive enterprises;Compared with other ownership enterprises,the minimum wage has a greater positive impact on the export domestic value added ratio of foreign-owned enterprises,Hong Kong,Macao and Taiwan enterprises;Compared with the central and western regions,the minimum wage standard has a greater positive impact on the export domestic value added ratio of enterprises in eastern regions.Finally,based on the research results,this paper puts forward relevant Suggestions from the perspective of both enterprise and the country to alleviate the labor cost rise caused by the increasing in the minimum wage standard.