The Fair Competition Review System:Can It Reduce Regional Disparities in the Labor Income Share
Breaking local protectionism and market segmentation,leveraging the regional advantages of each province,and establish-ing a unified national market are crucial pathways to optimizing the efficiency of resource allocation in the national market.In June 2016,the State Council issued the"Opinions on Establish-ing a Fair Competition Review System in the Development of the Market System",marking the formal establishment of China's fair competition review system.On June 6,2024,the State Council's Executive Meeting approved the"Regulations on Fair Competition Review,"which takes effect from August 1,2024,signifying that China has basically formed an antitrust legal system with Chinese characteristics,centered on the Anti-Monopoly Law,with relatively comprehensive content and robust institutions.The significant in-come distribution gap is a prominent issue facing China's economic and social development,severely constraining balanced economic growth and social stability.Narrowing the income and wealth gap has become a pivotal aspect of achieving common prosperity.As the most fundamental market entities,enterprises employ a vast amount of labor force and bear the significant responsibility of pri-mary income distribution in national income,with the distribution results primarily reflected in the labor income share of enterprises.How monopoly affects labor income share is a classic topic in labor economics,yet current research has not reached a consensus.Some studies suggest that monopoly hinders the increase in labor income share,while others provide evidence to the contrary.This paper ar-gues that the heterogeneity of monopoly is an important factor con-tributing to these differing conclusions.Monopoly can be divided into economic monopoly and administrative monopoly.Firms with economic monopoly possess stronger markup capabilities,enabling them to obtain higher net profits after deducting labor and capital expenditures.Profit distribution tends to favor capital,thereby im-peding the increase in labor income share within these enterprises.In contrast,administrative monopoly involves the improper use of administrative power by local government agencies to eliminate or restrict competition.Profit distribution in such cases tends to favor labor,often maintaining higher labor prices and a characteristic of redundant employees,which in turn promotes an increase in labor income share within enterprises.As a unique product of China's economic and social transformation,administrative monopoly is a distinctive and far-reaching type of monopoly in China's economic sphere.Additionally,the report of the 20th National Congress of the Communist Party of China points out the need to"eliminate local protectionism and administrative monopoly,"providing an important starting point for this paper to explore how the regulation of admin-istrative monopoly affects changes in China's labor income share,which holds significant practical importance.The implementation of the"Fair Competition Review System"pro-vides a favorable research opportunity for this paper to explore the impact of administrative monopoly regulation on labor income share.Firstly,this system offers a good scenario for causal inference.As the first system to constrain government behavior and regulate admin-istrative monopoly from the source,the"Fair Competition Review System"directly impacts enterprises,given that local governments in China are deeply involved in the market economy.Therefore,observ-ing changes in enterprise behavior makes it easier to obtain evidence for causal inference.Secondly,the impact of endogeneity is relatively small.On the one hand,the likelihood of micro-enterprise behavior influencing macro-layout is low,which alleviates concerns about re-verse causality endogeneity.On the other hand,the original intention of the"Fair Competition Review System"is to regulate administra-tive monopoly,not to improve the income distribution pattern within enterprises.Therefore,the system is relatively exogenous to the in-ternal income distribution of enterprises.Thirdly,administrative mo-nopoly is often characterized by inter-regional market segmentation,and the fair competition review system takes provinces as the basic implementation unit,which can effectively demonstrate the effects of administrative monopoly regulation,providing a good starting point for exploring the implementation effects of macro policies.Using Chinese A-share listed companies from 2013 to 2019 as a sam-ple,and based on the quasi-natural experiment of the implementation of the Fair Competition Review System,we employed a generalized difference-in-differences model to examine the impact of the Fair Competition Review System on regional differences in labor income share among enterprises.The study found that after the implementa-tion of the Fair Competition Review System,the gap in labor income share among enterprises in regions with different degrees of admin-istrative monopoly significantly narrowed,indicating that the system promoted fairness in the primary distribution process.Weakening the financing and market advantages of monopoly enterprises and prompting them to adjust their operating capital and the substitution elasticity of capital and labor factors are important channels for con-vergence in labor income share gaps.Heterogeneity tests revealed that the impact of institutional implementation was primarily observed in samples with highly concentrated markets,slower market develop-ment,and weaker labor bargaining power and labor protection.Fur-ther research excluded the crowding-out effect on labor employment scale and further verified that ordinary employees were the group more significantly affected.Our research contributions are as follows:First,it enriches theo-retical research in the field of anti-monopoly.In terms of research perspectives,the Fair Competition Review System is a major compe-tition policy specifically targeting administrative monopolies within China's anti-monopoly framework,incorporating government poli-cy-making behavior into the regulatory scope for the first time,mark-ing a milestone.However,existing research has primarily focused on economic monopolies,with insufficient discussion on how to regulate administrative monopolies.Therefore,we focus on the regulatory ef-fectiveness of the Fair Competition Review System on administrative monopolies,supplementing China's competition policy research sys-tem from the perspective of administrative monopolies.In terms of research content,there is controversy in existing research regarding whether monopoly increases or decreases labor income share,with monopoly heterogeneity being a significant reason for these differing conclusions.From the perspective of regulating administrative mo-nopolies,we provide new evidence on how monopoly affects labor income share,contributing to an understanding of the influencing factors and decision-making mechanisms behind changes in China's labor income share.Second,it enriches the research literature on in-come distribution.On the one hand,existing literature has explored the impact of administrative monopoly on income distribution from the perspectives of enterprises and industries.Based on the reality of uneven and inadequate regional development in China,we enrich this field of research from the perspective of regional administrative monopoly.On the other hand,existing literature has conducted ben-eficial explorations on the impact of institutional quality on labor in-come share from the perspective of segmentation in capital and labor factor markets.We enrich research on institutional quality and labor income share from the perspective of fair competition review.Third,in practical terms,our research contributes to understanding the rela-tionship between accelerating the construction of a unified national market and solidly promoting common prosperity.We found that the Fair Competition Review System alleviates the"Matthew Effect"phenomenon in initial income distribution by regulating financing and market advantages.In practice,special attention should be given to two types of behavior that are detrimental to income distribution:"setting unequal market entry or exit conditions through administra-tive approval"and"illegally granting preferential policies to specific operators in terms of capital factors."Therefore,regulating adminis-trative monopolies,reviewing and eliminating policies and measures that violate fair competition,will further contribute to promoting the formation of a unified national market,optimizing the income distri-bution structure,and achieving common prosperity.
Fair Competition Review SystemAdministrative Mo-nopolyLabor Income Share
万方数据
维普
