Title: Industry openness, firm characteristics, and wage inequality: evidence from Chinese manufacturing firms
Authors: Qiong Huang; Satish Chand
Addresses: School of Business, University of New South Wales, Canberra, Australia ' School of Business, University of New South Wales, Canberra, Australia
Abstract: Recent literature has cited trade liberalisation as a major cause for the growth of wage inequality in developing countries. This study uses primary data from 670 Chinese manufacturing firms, together with the newly introduced regression-based inequality decomposition method, to investigate the impact of industry openness on wage inequality. The empirical analysis shows that industry openness leads to a positive industry wage premium, and thereby contributes to the inter-industry wage inequality. However, the decomposition results suggest that the contribution industry openness to the wage inequality, although positive, is relatively small at 4.69%. The major contributor to the wage inequality is firms' difference in human capital, which accounted for 14.3%.
Keywords: openness; wage inequality; decomposition; China.
International Journal of Economic Policy in Emerging Economies, 2017 Vol.10 No.1, pp.98 - 108
Published online: 26 Apr 2017 *Full-text access for editors Access for subscribers Purchase this article Comment on this article