Impact of Minimum Wage on Firm Innovation
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| Title | Impact of Minimum Wage on Firm Innovation
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| Author | Zhang Jing,Lu Yi and Yang Zhi |
| Organization | Department of Economics, School of Economics, Xiamen University;Department of Economics, National University of Singapore;Department of Management, School of Management, Huazhong University of Science and Technology |
| Email | jzhang1@xmu.edu.cn;ecsluyi@nus.edu.sg; zhiyang@mail.hust.edu.cn |
| Key Words | Minimum Wage; Innovation; Private Firms; Industrial Upgrading |
| Abstract | Using private enterprises survey data from 2002-2006, this paper investigates the impact of minimum wage on firm innovation. We use R&D spending as a percentage of totals sales to measure the willingness of innovation. Besides, given the availability of data on the number of own design products as well as on the number of patents, we are able to measure the outcome of innovation. Our findings are in response to the increases in minimum wage rate, firms spend more on R&D activities and the number of own design products as well as the number of patents are also significantly increased. In particular, the results show that medium and small firms, labor intensive firms and firms with lower market power are more significantly affected by minimum wage increase and thus react more innovatively. |
| Serial Number | WP755 |
| Time | 2014-11-14 |
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