(picture source: pixabay)

The paper “Minimum Wage, Industrial Robots and Corporate Exit” co-authored by Professor Li Lei, Doctor Ma Huan and Assistant Research Fellow Xu Gang from our school was published in The Journal of World Economy, 1^st  issue of 2023.

This paper constructs a dataset of industrial enterprises across provincial border city pairs, combines national data from the business register to accurately identify the year of the industrial enterprise exit, estimates the impact of the minimum wage increase on enterprise exit, and examines the moderating effect of enterprises’ use of industrial robots. The results of the study indicate that an increase in minimum wage leads to an increase in the probability of exit, and enterprises’ use of industrial robots can ultimately eliminate the exit risk caused by the increase in minimum wage. The paper also validates these results using macro data from counties and districts across provincial borders, showing that the findings are robust. The mechanism study reveals that the exit risk is mitigated by the cost-saving and productivity-enhancing effects of the use of industrial robots. The findings of this paper present strong policy implications for “stable enterprises” and smart industrial transformation.

Founded in 1978 and sponsored by China Society of World Economics and Institute of World Economics and Politics Chinese Academy of Social Sciences, The Journal of World Economy is one of China’s earliest journals of world economy. It is recognized as a top journal of economics by universities and research institutions in China.