IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v158y2023ics0148296323000012.html
   My bibliography  Save this article

Measurement of factor mismatch in industrial enterprises with labor skills heterogeneity

Author

Listed:
  • Zhang, Shangfeng
  • Li, Xiujie
  • Zhang, Chaojie
  • Luo, Jiayu
  • Cheng, Can
  • Ge, Wanjun

Abstract

Since 1978, China’s industrial development has made great achievements, but the factor market’s development has lagged behind the commodity market’s development for a long time, leading to a factor mismatch in China’s industry, directly hindering the improvement of China’s industrial total factor productivity (TFP) and the growth of industrial output. It is of great theoretical and practical significance to study the economic efficiency loss caused by the mismatch of industrial factors for the successful transformation and sustainable development of China’s industry. In terms of economic reality, the uneven quality of China’s industrial enterprises’ labor force cannot be ignored; from the perspective of economic theoretical models, ignoring the heterogeneity of labor skills will lead to a wrong estimation of factor mismatch level. From the perspective of labor skill heterogeneity, this study constructs a factor measurement model - a multi-balanced heterogeneous manufacturer model to reveal the efficiency loss caused by the mismatch of labor factors with different skills. The empirical research finds that: first, by comparing the single equilibrium heterogeneous manufacturer model under the perspective of skill homogeneity with the multi-equilibrium heterogeneous manufacturer model under the perspective of labor skill heterogeneity, it can be seen that the former regards all labor forces as homogeneous, overestimates the degree of labor mismatch and then underestimates the potential TFP growth of China’s industrial enterprises; second, the vast majority of factor mismatches of China’s industrial enterprises come from within the industry, and the intra- and inter-industry mismatches of highly skilled labor are very serious.

Suggested Citation

  • Zhang, Shangfeng & Li, Xiujie & Zhang, Chaojie & Luo, Jiayu & Cheng, Can & Ge, Wanjun, 2023. "Measurement of factor mismatch in industrial enterprises with labor skills heterogeneity," Journal of Business Research, Elsevier, vol. 158(C).
  • Handle: RePEc:eee:jbrese:v:158:y:2023:i:c:s0148296323000012
    DOI: 10.1016/j.jbusres.2023.113643
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296323000012
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jbusres.2023.113643?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
    2. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    3. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    4. Aoki, Shuhei, 2012. "A simple accounting framework for the effect of resource misallocation on aggregate productivity," Journal of the Japanese and International Economies, Elsevier, vol. 26(4), pages 473-494.
    5. Gene M. Grossman & Elhanan Helpman, 2018. "Growth, Trade, and Inequality," Econometrica, Econometric Society, vol. 86(1), pages 37-83, January.
    6. Hongbin Cai & Qiao Liu, 2009. "Competition and Corporate Tax Avoidance: Evidence from Chinese Industrial Firms," Economic Journal, Royal Economic Society, vol. 119(537), pages 764-795, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yufei Cao & Abdulmajeed Mawhan H. Alfadhli & Mohammad Jaradat & Ramona Lile & Mihaela Gadoiu & Mariana Banuta & Daniela Mihai & Malik Shahzad Shabbir, 2024. "The impact of accounting practices on financial sustainability: A study of external block-holders and institutional ownership," Review of Managerial Science, Springer, vol. 18(7), pages 1945-1961, July.
    2. Qi, Fengyu & Guo, Dong & Xu, Yaping & Liu, Xiaoxue & Liu, Pengzhen & Xie, Youzhi, 2024. "How does circulation industry agglomeration help close the income gap between urban and rural areas? — Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 94(C).
    3. Jin, Laiqun & Cao, Kairui & Li, Jiaye & Xu, Qunfang, 2024. "Information infrastructure construction and optimization of resources allocation among firms: Evidence from “Broadband China” strategy," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 36-53.
    4. Zhang, Sheng & Yu, Ran & Wen, Zuhui & Xu, Jiayu & Liu, Peihan & Zhou, Yunqiao & Zheng, Xiaoqi & Wang, Lei & Hao, Jiming, 2023. "Impact of labor and energy allocation imbalance on carbon emission efficiency in China's industrial sectors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 184(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laiqun Jin & Changwei Mo & Bochao Zhang & Bing Yu, 2018. "What Is the Focus of Structural Reform in China?—Comparison of the Factor Misallocation Degree within the Manufacturing Industry with a Unified Model," Sustainability, MDPI, vol. 10(11), pages 1-19, November.
    2. Hang, Jing & Zhan, Chaoqun, 2023. "Government procurement and resource misallocation: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 216(C), pages 568-589.
    3. Laiqun Jin & Xiuyan Liu & Sam Hak Kan Tang, 2021. "High-Technology Zones, Misallocation of Resources among Cities and Aggregate Productivity: Evidence from China," Economics Discussion / Working Papers 21-11, The University of Western Australia, Department of Economics.
    4. Matteo G. Richiardi & Luis Valenzuela, 2024. "Firm heterogeneity and the aggregate labour share," LABOUR, CEIS, vol. 38(1), pages 66-101, March.
    5. David Van Dijcke, 2022. "On the Non-Identification of Revenue Production Functions," Papers 2212.04620, arXiv.org, revised May 2024.
    6. Francisco Queiró, 2022. "Entrepreneurial Human Capital and Firm Dynamics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(4), pages 2061-2100.
    7. De loecker, Jan & Asker, John & Collard-Wexler, Allan, 2011. "Productivity volatility and the misallocation of resources in developing economies," CEPR Discussion Papers 8469, C.E.P.R. Discussion Papers.
    8. Umut Kılınç, 2018. "Assessing Productivity Gains from International Trade in a Small Open Economy," Open Economies Review, Springer, vol. 29(5), pages 953-980, November.
    9. Ezra Oberfield & Devesh Raval, 2021. "Micro Data and Macro Technology," Econometrica, Econometric Society, vol. 89(2), pages 703-732, March.
    10. Kaiji Chen & Alfonso Irarrazabal, 2015. "The Role of Allocative Efficiency in a Decade of Recovery," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(3), pages 523-550, July.
    11. Felipe Saffie & Liliana Varela & Kei-Mu Yi, 2020. "The Micro and Macro Dynamics of Capital Flows," NBER Working Papers 27371, National Bureau of Economic Research, Inc.
    12. Mertens, Matthias & Mueller, Steffen, 2022. "The East-West German gap in revenue productivity:Just a tale of output prices?," Journal of Comparative Economics, Elsevier, vol. 50(3), pages 815-831.
    13. Neira, Julian, 2019. "Bankruptcy and cross-country differences in productivity," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 359-381.
    14. Dobbelaere, Sabien & Kiyota, Kozo & Mairesse, Jacques, 2015. "Product and labor market imperfections and scale economies: Micro-evidence on France, Japan and the Netherlands," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 290-322.
    15. Gaaitzen J. Vries, 2014. "Productivity in a Distorted Market: The Case of Brazil's Retail Sector," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(3), pages 499-524, September.
    16. Luis Garicano & Claire Lelarge & John Van Reenen, 2016. "Firm Size Distortions and the Productivity Distribution: Evidence from France," American Economic Review, American Economic Association, vol. 106(11), pages 3439-3479, November.
    17. Xiaobing, Huang & Xiaolian, Liu, 2015. "Exporting firm dynamics and productivity growth: Evidence from China," Economics Discussion Papers 2015-64, Kiel Institute for the World Economy (IfW Kiel).
    18. Marc J. Melitz & Sašo Polanec, 2015. "Dynamic Olley-Pakes productivity decomposition with entry and exit," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 362-375, June.
    19. Miaojie Yu, 2010. "Processing Trade, Firm's Productivity, and Tariff Reductions : Evidence from Chinese Products," Macroeconomics Working Papers 22799, East Asian Bureau of Economic Research.
    20. Antonin Bergeaud & Simon Ray, 2021. "Adjustment Costs and Factor Demand: New Evidence from Firms’ Real Estate [The heterogeneous impact of market size on innovation: evidence from French firm-level exports]," The Economic Journal, Royal Economic Society, vol. 131(633), pages 70-100.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:158:y:2023:i:c:s0148296323000012. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.