{"title":"Dialect diversity and labor income share in China","authors":"Xu Si , Yulin Liu , Jun Wang","doi":"10.1016/j.ecosys.2023.101145","DOIUrl":null,"url":null,"abstract":"<div><p>Language, as a prominent cultural characteristic of a region, has a lasting and extensive impact on economic performance. In this paper, we study the impact of dialect diversity on the labor income share in China. We find that regional dialect diversity depresses the labor income share in manufacturing firms in China. This effect holds up to robustness and endogeneity checks. We explore the transmission channels underlying this negative relationship and find that dialect diversity depresses the labor income share by decreasing worker bargaining power, and this channel can be further explained by the depressing effect of dialect diversity on the participation of firms in export trade and regional human capital accumulation. Heterogeneity analysis shows that the negative effect of dialect diversity on the labor share is weak or insignificant in sectors with strong worker bargaining power such as state-owned enterprises, labor-intensive enterprises, and high-skill-intensive enterprises.</p></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"47 4","pages":"Article 101145"},"PeriodicalIF":2.8000,"publicationDate":"2023-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Systems","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0939362523000845","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
Language, as a prominent cultural characteristic of a region, has a lasting and extensive impact on economic performance. In this paper, we study the impact of dialect diversity on the labor income share in China. We find that regional dialect diversity depresses the labor income share in manufacturing firms in China. This effect holds up to robustness and endogeneity checks. We explore the transmission channels underlying this negative relationship and find that dialect diversity depresses the labor income share by decreasing worker bargaining power, and this channel can be further explained by the depressing effect of dialect diversity on the participation of firms in export trade and regional human capital accumulation. Heterogeneity analysis shows that the negative effect of dialect diversity on the labor share is weak or insignificant in sectors with strong worker bargaining power such as state-owned enterprises, labor-intensive enterprises, and high-skill-intensive enterprises.
期刊介绍：
Economic Systems is a refereed journal for the analysis of causes and consequences of the significant institutional variety prevailing among developed, developing, and emerging economies, as well as attempts at and proposals for their reform. The journal is open to micro and macro contributions, theoretical as well as empirical, the latter to analyze related topics against the background of country or region-specific experiences. In this respect, Economic Systems retains its long standing interest in the emerging economies of Central and Eastern Europe and other former transition economies, but also encourages contributions that cover any part of the world, including Asia, Latin America, the Middle East, or Africa.
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