Cooperation, open and upgrade: How does foreign ownership structure affect the skill upgrade of domestic-sale and export enterprises?

ABSTRACT

Faced with the double shock of COVID-19 and Sino-US trade conflict, how to upgrade technology and products and then establish a "dual circulation" development pattern has become the major challenges for Chinese government and enterprises. Under the framework of heterogeneous enterprise theory, this paper introduces foreign ownership structure into enterprise skill demand function, and discusses the influence of foreign ownership structure on the skill upgrade of export enterprises and domestic enterprises. And this paper make empirical verification for the model deductions, based on the data of industrial enterprise from 2000 to 2008. The results confirm that1) The skilled wage of export enterprises are always higher than that of domestic enterprises based on the same proportion of foreign capital;2) The skilled wage of domestic-sale and export firms will increase with higher proportion of foreign capital, but the characteristics of the latter only holds for foreign-ownership enterprises;3) Once the proportion of foreign exceed 0.5, it will induce a dramatic change for corporate culture, and thus impulse the skilled wage jump up into a higher level which is more prominent among exporters. It is showed that continuing to expand the level of opening to the outside world, lifting control on foreign capital, strengthening the cooperation between domestic and foreign capital can more effectively promote the technology promotion and skill upgrading of Chinese enterprises, and jointly accelerate the establishment of an expanding domestic market and a leading trade power. © 2022 Systems Engineering Society of China. All rights reserved.