Does Institution-Based Liberalization Reduce the Inter-Firm Wage Gap?—A Quasi-Experiment Based on Pilot Free Trade Zones
Implementing an institutional open strategy through benchmarking in-ternational standards for domestic institutional innovation is not only conducive to achieving further secure and orderly integration between China and the global econo-my but also exerts a significant impact on the domestic income distribution pat-tern.Free Trade Zones(FTZs)serve as a crucial lever for achieving high-level openness.This paper views the construction of FTZs as a natural experiment.Based on the data of China A-share listed companies from 2009 to 2021,it examines the impact of the opening up,based on rules and related institutions,on inter-enter-prise wage disparities and its underlying mechanisms.The study reveals that opening up,based on rules and related institutions,significantly reduces wage disparities among enterprises.Mechanism tests indicate that,by constructing FTZs benchmark-ing international standards,domestic institutional optimization is achieved.The re-sulting market competition effect and alleviation of unequal financing constraints among enterprises are potential channels contributing to the reduction of inter-enter-prise wage disparities.Extended analysis further discovers that the construction of FTZs not only reduces inter-enterprise wage disparities but also does not significantly increase intra-enterprise wage disparities.This implies that low-wage groups within en-terprises are not the primary contributors to the convergence of wages among enterpri-ses,highlighting the inclusive prosperity characteristics of institutional openness.The findings of this paper hold reference significance for advancing the construction of common prosperity through institution-based economic opening in China.
Intra-firm Wage DispersionOpening Based on Rules and Related InstitutionsBusiness Environment Optimization
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