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The impact of global value chain position on wage income inequality: Empirical evidence from Chinese listed companies

Published online by Cambridge University Press:  28 March 2025

Alai Yeerken Open the ORCID record for Alai Yeerken [Opens in a new window]  and
Feng Deng
Alai Yeerken
Affiliation:
School of International Economics and Trade, Xinjiang University of Finance and Economics Urumqi 830046, China
Feng Deng*
Affiliation:
School of Economics and Management, Xinjiang University, Urumqi 830046, China
*
Corresponding author: Feng Deng; Email: xjdxjgxydf@163.com
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Abstract

The study is based on data from Chinese listed companies and explores the impact of a company’s position in the global value chain (GVC) on internal wage distribution and income inequality. The results show that although the improvement of GVC status in enterprises has increased the average salary level of all employees, it has exacerbated the wage gap between management and grassroots employees, leading to widening income inequality, mainly achieved through rent-sharing mechanisms. In addition, companies with higher human capital can alleviate the income inequality effect caused by the rise of GVC status. Further analysis reveals that the impact of GVC status on internal income inequality in enterprises is heterogeneous regarding property rights, employee bargaining power, and enterprise size. The study provides a new perspective on exploring the income distribution effects of the GVC from a micro perspective, emphasising that enterprises need to pay attention to building a fair and reasonable income distribution structure while being open to others at a high level. It is significant for promoting the construction of micro-mechanisms based on enterprises, fostering social equity and inclusive growth.

Keywords

common prosperityglobal value chainsincome inequalityrent sharingsocial equity and inclusive growthJ31J38F61F66

Information

Type
Original Article
Information
The Economic and Labour Relations Review , Volume 35 , Issue 4 , December 2024 , pp. 1044 - 1068
Copyright
© The Author(s), 2025. Published by Cambridge University Press on behalf of The University of New South Wales

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