The Impact Of Minimum Wage Standards On Firms’ OFDI

The setting of the minimum wage has always been a controversial topic.How does the increase in wages affect the development of the economy? For micro-enterprises,the minimum wage standard increases their employment costs.On the one hand,it aggravates the burden of enterprises;Transition to high-quality development.By studying micro-enterprises,this paper explores whether the increase in the minimum wage standard has had a optimistic effect on the OFDI of enterprises.First of all,this paper sorts out the research results of scholars at home and abroad,and analyzes the role of the minimum wage system.The rise of the minimum wage has led to the increase of the basic wage,and it has also led to the increase of other basic wages based on the minimum wage standard or the wage level in a certain proportion.Confirmed overtime wages,employee unemployment insurance benefits,paid vacation wages,sick leave wages during the medical treatment period,probationary wages,public welfare post wages,and wages and living expenses in the event of closure of the unit or suspension of production,etc.labor costs.In order to pursue low cost,enterprises have to make foreign investment.Secondly,based on the research of scholars at home and abroad,this paper constructs a theoretical model,and analyzes the theoretical mechanism of the minimum wage affecting enterprises’ OFDI,the behavior pattern of consumers,the behavior of producers,the influencing factors of foreign investment behavior,and finds that the home country has the lowest Higher wages do increase the likelihood that firms will invest abroad,and the effect is more pronounced for firms with higher productivity.Thirdly,this paper builds a database,including the database of Chinese industrial enterprises,the list of foreign investment,the minimum wage standards of various provinces,cities and regions over the years,and the China Statistical Yearbook.The degree of change in wages and the change in the amount of firms’ OFDI pave the way for the empirical test below.Fourth,this paper constructs an empirical model to test the rationality of the above assumptions,and uses the constructed data collection to obtain robust estimation results and affirmative conclusions.And further carry out the heterogeneity test to analyze the different effects of different enterprise ownership,enterprise location,and enterprise type,as well as the impact of the strengthening of the legal system of minimum wages and the strengthening of labor protection.Finally,in response to the research propositions proposed in this paper,policy recommendations are put forward from various levels such as enterprises,industries,and governments.It is hoped that while protecting the rights and interests of workers,the business environment should be optimized,and the protection should be moderate,which can promote the healthy development of enterprises.so that the competitiveness of enterprises is strengthened and a sufficient balance is maintained.