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Competition policy and labor income share: Evidence from the antitrust policy in China

Year: 2024

Type: article

Abstract: 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.

Source: Economic Analysis and Policy

DOI: 10.1016/j.eap.2024.08.003

Authors: Rui Cheng, Jing Li, Ting Wu

Institution: Anhui University of Finance and Economics

Language: English

Topic: Merger and Competition Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $2,250