Do City Exports Increase City Wages? Empirical Evidence from 286 Chinese Cities

Abstract

The optimization of income distribution is an important index to achieve high-quality economic development in the process of urbanization. Using matched data from the China Statistical Yearbook and Customs Statistical Database, this paper examines the impact of city exports on city wages based on panel data from 286 Chinese cities at or above the prefecture level. The paper finds that city exports increase city wages through technology-upgrading mechanisms and profit-sharing mechanisms. This conclusion is found to be robust after a series of tests. The paper further analyses the impact of city exports on city wages by classifying the location and scale of cities. The results show that city exports increase the wages of large cities, eastern cities and central cities but have no effect on medium cities, small cities and western cities. In the process of urbanization, it is essential to further improve the quality and efficiency of exports, increase investment in R&D and education, optimise income distribution and promote regional coordinated development.