Does Companies’ Investment in ASEAN Countries Raise the Wages of Their Employees?
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Abstract
This study examines (1) the impact of Chinese enterprises' investment in ASEAN countries on employee compensation, (2) the internal mechanisms driving this effect, and (3) heterogeneity across firm types. Using a sample of 1,248 Shanghai and Shenzhen A-share listed companies from 2008 to 2022 (totaling 29,957 firm-year observations), this study employs a difference-in-differences approach by leveraging the Belt and Road Initiative (BRI) as a quasi-natural experiment. Key findings include: Propensity score matching (PSM) estimates indicate that investing in ASEAN countries increased employee wages by 23.5% (β=0.235, p<0.01), with a net effect of 6.5% (β=0.065, p<0.01) after controlling for firm characteristics. Cross-cultural management (proxied by ASEAN executive share) mediates 8.6% of the total wage effect (indirect effect=0.0059, p<0.01). Government affiliations explain a smaller but significant 0.64% of the effect (indirect effect=0.0004, p<0.05). Both channels operate through the Belt and Road Initiative’s emphasis on international collaboration and political engagement. Heterogeneous effects exist: state-owned enterprises (SOEs) showed a 10.7% wage increase compared to 4.4% for non-SOEs, and firms in BRI key industries (e.g., key cooperation industries, β=0.096) and key provinces (e.g., important node cities, β=0.082) exhibited stronger responses
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