1. Competition policy and labor income share: Evidence from the antitrust policy in China.
- Author
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Cheng, Rui, Li, Jing, and Wu, Ting
- Subjects
MARKET power ,INCOME ,LABOR market ,LABOR policy ,MONOPOLIES ,ANTITRUST law - Abstract
• China's Anti-Monopoly Law (AML) has a positive impact on average labor wage. • Labor income share increases more in local state-owned and nonstate-owned enterprises. • AML effectively promotes industry competition and boosts the labor income share. • AML reduces market power, curbs monopoly profit, and increases the average labor wage. This study examines the impact of increased market competition on labor income share. We use the enactment of China's Anti-Monopoly Law as a quasi-natural experiment. The results reveal that the Anti-Monopoly Law has a significant positive effect on the labor income share of firms with higher market power. This is because the rising market competition, effected by the Anti-Monopoly Law, inhibits market power and increases average labor wages. Our findings are relevant for firms in provinces with higher administrative monopolies, with less competition, and under industries with less competition. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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