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Wages, Innovation, and Employment in China

Author

Listed:
  • Fleisher, Belton M.

    () (Ohio State University)

  • McGuire, William H.

    () (University of Washington Tacoma)

  • Wang, Xiaojun

    () (University of Hawaii at Manoa)

  • Zhao, Min Qiang

    () (Xiamen University)

Abstract

We investigate the role of factor-priced-induced innovation in mediating the employment impact of expanding production in China. Our empirical approach implements concepts developed in Acemoglu (2010) and complements the approaches summarized by Wei, Xie, and Zhang (2017) that focus on directly observable aspects of innovation (R&D, patent activity, etc.); labor-force characteristics including the availability of "surplus" labor, investments in human capital; and investments in physical capital. It complements work on the causes of a decline in labor's share in total output as documented in Bai and Qian (2010) and in Molero-Simarro (2017). Our empirical results to date support the hypothesis that wage-induced technology change has influenced productivity growth in China, at least in the decade of the 1990s, but perhaps less so or not at all after the middle of the next decade.

Suggested Citation

  • Fleisher, Belton M. & McGuire, William H. & Wang, Xiaojun & Zhao, Min Qiang, 2017. "Wages, Innovation, and Employment in China," IZA Discussion Papers 10749, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10749
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    References listed on IDEAS

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    More about this item

    Keywords

    endogenous innovation; China; factor shares;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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