The Effects of Rural-Urban Migration on Corporate Innovation: Evidence from a Natural Experiment in China

41 Pages Posted: 24 Apr 2019

See all articles by Deqiu Chen

Deqiu Chen

University of International Business and Economics

Huasheng Gao

Fanhai International School of Finance, Fudan University

Jiang Luo

Nanyang Business School, Nanyang Technological University

Yujing Ma

Hong Kong Polytechnic University

Date Written: March 25, 2019

Abstract

We show that the migration of low-skilled, rural workers to urban centers has a negative causal effect on innovation of firms in such urban centers. Our tests exploit the staggered relaxation of city-level household registration system in China, which facilitates rural residents to migrate to cities. We find a significant decrease in innovation for firms headquartered in cities that have adopted such policies relative to firms headquartered in cities that have not. Overall, our results support the view that an abundant supply of low-skilled workers increases the benefit of using existing low-skilled technology and thus reduces firms’ incentive to innovate.

Keywords: Innovation, Patents; Migration, Low-Skilled Worker, Household Registration, Hukou

JEL Classification: G38, J24, O31

Suggested Citation

Chen, Deqiu and Gao, Huasheng and Luo, Jiang and Ma, Yujing, The Effects of Rural-Urban Migration on Corporate Innovation: Evidence from a Natural Experiment in China (March 25, 2019). Available at SSRN: https://ssrn.com/abstract=3360197 or http://dx.doi.org/10.2139/ssrn.3360197

Deqiu Chen

University of International Business and Economics ( email )

Beijing
China

Huasheng Gao (Contact Author)

Fanhai International School of Finance, Fudan University ( email )

Beijing West District Baiyun Load 10th
Shanghai, 100045
China
2165642222 (Phone)
2165642222 (Fax)

Jiang Luo

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore

Yujing Ma

Hong Kong Polytechnic University ( email )

Hung Hom
Kowloon
Hong Kong

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
202
Abstract Views
1,134
rank
213,363
PlumX Metrics