Abstract
Based on the data of China’s listed companies in Shanghai Stock Exchange and Shenzhen Stock Exchange from 2003 to 2017, this paper tries to figure out effect of FDI on China’s labor income share from a micro perspective. Now the reform and opening up and market-oriented reform in China continue to evolve, but the labor income share of foreign enterprises is not significantly bigger than that of domestic enterprises, which indicates that the promoting effect of foreign direct investment on labor income share of employees of the listed companies in China is declining or disappearing, but high-level control of foreign investors will raise the labor income share.
Highlights
Since the reform and opening up policy was implemented in 1978, China has experienced the extraordinary four-decade rapid economic growth, which is known as the “Chinese Miracle”
Based on the data of China’s listed companies in Shanghai Stock Exchange and Shenzhen Stock Exchange from 2003 to 2017, this paper tries to figure out effect of Foreign Direct Investment (FDI) on China’s labor income share from a micro perspective
How to meet the people’s growing needs for a better life in the context of economy slowing down and supply side structural reform? How to empower people to enjoy the fruits of economic development? These questions have been raised as the big concerns of many scholars and government officials
Summary
Since the reform and opening up policy was implemented in 1978, China has experienced the extraordinary four-decade rapid economic growth, which is known as the “Chinese Miracle”. It is difficult for a large-scale economy to maintain a high growth rate for a long period of time, and China’s economic development has entered a stage known as “the new normal of the economy”. In the “Trump era”, trade protectionism against globalization is becoming increasingly serious, which has had an impact on China’s export; foreign direct investment is especially important to promote China’s economic growth. Many scholars have tried to explain this phenomenon from different perspectives, such as technological innovation, the relative price of capital to labor, market demand, changes in economic structure, corporate profitability, tax system, and industrial development (Zhao, 2006; Li, 2007; Jiang & Wang, 2009; Bai et al, 2008; Bai & Qian, 2010)
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