Effects of the Minimum Wage on Small Firms in China: Spillover Effects from Large Firms

2022 ◽  
pp. 1-17
Author(s):  
Qiaoyi Chen ◽  
Zhao Chen ◽  
Lin Guan
Keyword(s):  
Minimum Wage ◽  
Small Firms ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Unintended Consequences ◽  
Displaced Workers ◽  
High Tech ◽  
Large Firms ◽  
Firm Level ◽  
Employment Effects

Abstract This study investigates how minimum wage affects small firms through spillover effects from large firms. Using firm-level panel data from Anhui Province in China, we find that after a minimum wage increase, small firms will reduce workers’ wages and create jobs due to the inflow of displaced workers from large firms. This spillover effect is larger for micro firms and private firms, where minimum wage compliance tends to be lower. We also find that high-tech small firms are more affected than low-tech ones because of their greater demand for skilled labor. Our findings not only highlight the unintended consequences of minimum wage on small firms in China, but also help to explain the ambiguous employment effects of minimum wage on the covered sector in developing countries.

scholarly journals Innovation in the Textiles Sector: A Firm-Level Analysis of Technological and Nontechnological Innovation

2016 ◽  
Vol 21 (Special Edition) ◽  
pp. 129-166 ◽  
Author(s):  
Waqar Wadho ◽  
Azam Chaudhry
Keyword(s):  
Small Firms ◽  
Innovation Process ◽  
Foreign Market ◽  
Knowledge Flows ◽  
Innovation Activity ◽  
Local Market ◽  
Large Firms ◽  
Firm Level ◽  
Innovation Activities ◽  
Innovation Rate

In a knowledge-based economy, it has become increasingly important to better understand critical aspects of the innovation process such as innovation activities beyond R&D, the interaction among different actors in the market and the relevant knowledge flows. Using a sample of 431 textiles and apparel manufacturers, this paper explores the dynamics of firms’ innovation activities by analyzing their innovation behavior, the extent and types of innovation, the resources devoted to innovation, sources of knowledge spillovers, the factors hampering technological innovation and the returns to innovation for three years, 2013–15. Our results show that 56 percent of the surveyed firms introduced technological and/or nontechnological innovations, while 38 percent introduced new products, these innovations were generally incremental as the majority of innovations were new only to the firm. Furthermore, the innovation rate increases with firm size; large firms have an innovation rate of 83 percent, followed by medium firms (68 percent) and small firms (39 percent). Technologically innovative firms spent, on average, 10 percent of their turnover on innovation expenditure in 2015. Acquisition of machinery and equipment is the main innovation activity, accounting for 56 percent of innovation expenditures. Large firms consider foreign market sources (clients and suppliers) and small firms consider local market sources their key source of information and cooperation. 63 percent of technological innovators cite improving the quality of goods as their most important objective. Lack of available funds within the enterprise is the single most important cost factor hampering innovation, followed by the high cost of innovation. Our results show that 67 percent of the turnover among product innovators in 2015 resulted from product innovations that were either new to the market or new to the firm.

A Perceptual Measure of Innovation Performance: Firm-Level Evidence from Turkey

2017 ◽  
Vol 14 (06) ◽  
pp. 1750038 ◽  
Author(s):  
Derya Findik ◽  
Berna Beyhan
Keyword(s):  
Factor Analysis ◽  
Small Firms ◽  
Innovation Performance ◽  
Large Firms ◽  
Firm Level ◽  
Process Innovations ◽  
Significant Difference ◽  
Process Oriented ◽  
Product And Process ◽  
The Impact

This paper aims to introduce a qualitative indicator to measure innovation performance of Turkish firms by using firm-level data collected by Turkish Statistical Institute (TURKSTAT) in 2008 and 2009. We propose a new indicator to measure the innovation performance which is simply based on the perception of firms regarding to the impacts of innovation. In order to create performance indicators, we conduct a factor analysis to group the firms’ perceptions on the impacts of innovation. Factor analysis gives us product and process-oriented impacts of innovation. There are significant differences among product innovators, process innovators and firms engaged in both product and process innovations with respect to their perceptions on product and process-oriented impacts of innovation. Among these three groups, product- and process-oriented impacts provide a highest value for the firms that perform both product and process innovations. As far as the link between firm characteristics and the impact of innovation is considered, there is a significant difference between small and large firms with respect to their perceptions on product-oriented impact of innovation. While product-oriented impact is larger for small firms, large firms focus more on process-oriented impact. Anova results also indicate that perceptions on process-oriented impact significantly differ among exporter firms, domestic market-oriented firms and firms being active in internal and external markets. Process-oriented impact generates results in favor of exporting firms.

FDIs Productivity Spillovers in Regional Clusters: A Comparison between Poland and Romania

2010 ◽  
pp. 99-120
Author(s):  
Chiara Franco ◽  
Kornelia Kozovska
Keyword(s):  
Negative Impact ◽  
Empirical Studies ◽  
Spillover Effects ◽  
Empirical Literature ◽  
High Tech ◽  
Foreign Direct Investments ◽  
The European Union ◽  
Firm Level ◽  
Regional Clusters ◽  
Eastern European Countries

In recent years Foreign Direct Investments (FDIs) inflows towards Eastern European countries have progressively increased, further stimulated by the entry of some countries into the European Union. However, the empirical literature finds mixed evidence for the actual occurrence of spillover effects from MNEs. We contribute to this discussion by investigating whether spillover effects occur more frequently in domestic firms located within regional clusters, taking into account the distinction between low-tech and high-tech sectors. Our findings show no evidence that location within regional clusters contributes to firms benefiting from FDIs spillovers. The findings for Romania show that, on the contrary, the productivity of firms located within regional clusters is influenced more negatively by the presence of MNEs than of firms located outside regional clusters. Furthermore, we find that FDIs have, in most cases, negative impact on firm-level productivity, in line with the previous findings of empirical studies on transition countries.

Challenges for Innovation Due to Firm Size

2016 ◽  
pp. 355-375 ◽  
Author(s):  
Graziela Ferrero Zucoloto ◽  
Mauro Oddo Nogueira
Keyword(s):  
Small Businesses ◽  
Small Firms ◽  
New Products ◽  
High Tech ◽  
Large Firms ◽  
Small Companies ◽  
Barriers And Opportunities ◽  
The Empirical Analysis ◽  
Innovative Capacity

This chapter analyses the innovative capacity of small firms compared to medium and large firms in Brazilian industry. It presents the Schumpterian debate regarding the role of small and large firms as inductors of innovation, including a brief discussion about the barriers and opportunities for innovation faced by small businesses, particularly in developing countries. The empirical analysis is based on the Brazilian Innovation Survey, which is used to compare the innovative efforts undertaken by small, medium and large enterprises. Its main findings are that in Brazil, large companies predominate in the creation of new products and processes, while smaller perform more effort than those in innovations associated with processes modernization. However, from the observation of the industry sectorial structure, it identifies that in high-tech sectors, Brazilian small companies outperform large in efforts in R&D.

scholarly journals Reverse educational spillovers at the firm level

2017 ◽  
Vol 5 (1) ◽  
pp. 80-106 ◽  
Author(s):  
Uschi Backes-Gellner ◽  
Christian Rupietta ◽  
Simone N. Tuor Sartore
Keyword(s):  
Fixed Effects ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Ordinary Least Squares ◽  
Vocational Education And Training ◽  
Academic Education ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Education Academic

Purpose The purpose of this paper is to examine spillover effects across differently educated workers. For the first time, the authors consider “reverse” spillover effects, i.e. spillover effects from secondary-educated workers with dual vocational education and training (VET) to tertiary-educated workers with academic education. The authors argue that, due to structural differences in training methodology and content, secondary-educated workers with VET degrees have knowledge that tertiary academically educated workers do not have. Design/methodology/approach The authors use data from a large employer-employee data set: the Swiss Earnings Structure Survey. The authors estimate ordinary least squares and fixed effects panel-data models to identify such “reverse” spillover effects. Moreover, the authors consider the endogenous workforce composition. Findings The authors find that tertiary-educated workers have higher productivity when working together with secondary-educated workers with VET degrees. The instrumental variable estimations support this finding. The functional form of the reverse spillover effect is inverted-U-shaped. This means that at first the reverse spillover effect from an additional secondary-educated worker is positive but diminishing. Research limitations/implications The results imply that firms need to combine different types of workers because their different kinds of knowledge produce spillover effects and thereby lead to overall higher productivity. Originality/value The traditional view of spillover effects assumes that tertiary-educated workers create spillover effects toward secondary-educated workers. However, the authors show that workers who differ in their type of education (academic vs vocational) may also create reverse spillover effects.

scholarly journals Global Value Chains and Productivity

2020 ◽  
Vol 20 (117) ◽  
Author(s):  
Hang Banh ◽  
Philippe Wingender ◽  
Cheikh Gueye
Keyword(s):  
Small Firms ◽  
Global Value Chains ◽  
Value Chains ◽  
Aggregate Productivity ◽  
Large Firms ◽  
Potential Growth ◽  
Firm Level ◽  
Exporting Firms ◽  
Level Data ◽  
The Impact

The COVID-19 pandemic has led to an unprecedented collapse in global economic activity and trade. The crisis has also highlighted the role played by global value chains (GVC), with countries facing shortages of components vital to everything from health systems to everyday household goods. Despite the vulnerabilities associated with increased interconnectedness, GVCs have also contributed to increasing productivity and long-term growth. We explore empirically the impact of GVC participation on productivity in Estonia using firm-level data from 2000 to 2016. We find that higher GVC participation at the industry level significantly boosts productivity at both the industry and the firm level. Frontier firms, large firms, and exporting firms also benefit more from GVC participation than non-frontier firms, small firms, and non-exporting firms. We also find that GVC participation of downstream industries has a negative correlation with productivity. Frontier firms and large firms benefit more from GVC participation of upstream industries, while non-frontier firms and small firms benefit more from GVC participation of downstream industries. Our results suggest that policies designed to promote participation in GVCs are important to raise aggregate productivity and potential growth in Estonia.

scholarly journals An Exploration Of Geographic Scope: The Cluster Of Grenoble

2014 ◽  
Vol 30 (2) ◽  
pp. 361
Author(s):  
Laurent Scaringella
Keyword(s):  
Information And Communication Technologies ◽  
Risk Perceptions ◽  
Small Firms ◽  
Knowledge Spillovers ◽  
Knowledge Flows ◽  
High Tech ◽  
Research Centers ◽  
Large Firms ◽  
Geographic Scope ◽  
Engineering Sciences

<p>This article examines the high-tech cluster of Grenoble in the light of regional studies. In particular, we explore the geographic scope of organizations, knowledge flows and risk perceptions. Using a large quantitative dataset, we observe that trial-driven synthetic knowledge-flow dynamics are generally based on the engineering sciences and develop over large distances, posing a challenge to well-established clusters. Our results emphasize significant differences across organization types (firms, research centers, universities, and public bodies) and organization sizes (small, medium, and large). We find that large firms develop knowledge-flows dynamics over greater distances than small firms and that research centers, universities and medium-sized firms perceive greater knowledge anchoring than do small and large firms. In addition, we find that theory-driven analytical and branding-driven symbolic knowledge are more anchored than synthetic knowledge, which is the type of knowledge of greatest value in information and communication technologies (ICT). Finally, we argue that the increase of geographical distance between knowledge senders and receivers increases the perception of the risk of unintended knowledge spillovers.</p>

scholarly journals The Spillover Effect of US Industrial Subsidies on China’s Exports

2020 ◽  
Vol 12 (7) ◽  
pp. 2938
Author(s):  
Yanfeng Lou ◽  
Yezhuang Tian ◽  
Kai Wang
Keyword(s):  
Negative Impact ◽  
Spillover Effect ◽  
Spillover Effects ◽  
International Markets ◽  
Business Environment ◽  
High Tech ◽  
State Governments ◽  
Subsidy Policy ◽  
Export Prices ◽  
The Us

This study systematically assessed the spillover effects of US industrial subsidy policies on China’s export by matching all related bills issued by the US federal and state governments since 2009 with the affected products exported from China. In general, the US subsidy policies created a significant obstacle for Chinese exporters entering the US market. In addition, the industry-level analysis indicated that the subsidy policy has the most significant negative spillover effect on mid- and high-tech products, and no significant impact on resource-based and low-tech export products. Furthermore, we explored the mechanism and found that the US subsidies lower the domestic export prices of the affected products, thereby having a larger negative impact on the entry of mid- and high-tech products entering the US market. The implementation of the US subsidy increased the export competitiveness of mid- and high-tech products in domestic market, which helped such US firms expand their international markets. Therefore, we offer targeted suggestions in order to create a fair and reasonable business environment for Chinese exporters.

scholarly journals Development zone spillover effect: the externality of the gathering of manufacturing enterprises

2021 ◽  
Vol 251 ◽  
pp. 01006
Author(s):  
Yilin Wang
Keyword(s):  
Technological Development ◽  
Spillover Effect ◽  
State Level ◽  
Spillover Effects ◽  
High Tech ◽  
Development Zone ◽  
Robust Identification ◽  
Manufacturing Enterprises ◽  
Different Characteristics ◽  
The Impact

Using the data of manufacturing enterprises from 2003 to 2013 and the data of the state-level economic and technological development zone and high-tech development zone from 2010 to 2012, this paper uses BD-DD dual robust identification strategy to analyse the impact mechanism of the overflow effect of the establishment of state-level development zones by accurately judging the geographical relationship between enterprises and development zones. The results show that the development zone has a significant spillover effect on the surrounding manufacturing enterprises, and the total factor productivity of enterprises within 1000m is about 9% higher than that of enterprises within 1000m from the boundary of the development zone and the existence of Marshall’s adjust theory is tested. Spillover effects have a range of 1000m on innovation, while human capital is only 500m, indicating that knowledge spillover effects established in development zones are the main source of gathering externality. From the different characteristics of manufacturing, high-tech or mature manufacturing enterprises are more affected by spillover effects, possibly because high-tech or mature enterprises and regional enterprises overlap more in factors of production or technology, it is more likely to form Marshall cluster externality.

Empirical Analysis of Technical and Allocative Efficiency of Firms and International Trade Behaviour

2020 ◽  
pp. 123-156
Author(s):  
Murali Patibandla
Keyword(s):  
Technical Efficiency ◽  
Comparative Advantage ◽  
Small Firms ◽  
Allocative Efficiency ◽  
Large Firms ◽  
Firm Level ◽  
Capital Costs ◽  
Factor Markets ◽  
Medium Firms ◽  
Technical And Allocative Efficiency

We measured firm-level relative technical and allocative efficiency drawing from Farrell’s production frontier approach. Technical efficiency captures technology dimension of realization amount output for given level of inputs employed. It is determined by technological, organizational firms and consequent technical efficiency. It shows very large and small firms are relatively technically inefficient compared medium sized firms. And technical efficiency explained exports positively. These results support our main hypotheses. Firm-level allocative efficiency is optimum combination of inputs (labour and capital) given the input prices (wages and capital costs). We argued that India’s factor markets were fragmented: large firms pay lower price to capital and higher price labour in comparison small and medium firms. This, in turn, made large firms deviate from India’s comparative advantage in labour intensity. On the other hand, small and medium scale firms realized allocative efficiency in accordance with India’s comparative advantage.

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