Research on wage distortion in R&D and innovation activities —— Evidence from China's listed manufacturing enterprises

Under the dual emphasis on the innovation-driven development strategy and the goal of common prosperity, scientifically evaluating wage distortion in R&D and innovation activities (WD-RDIA) is of critical importance for improving income distribution mechanisms, enhancing innovation efficiency, and strengthening national core competitiveness. This study utilizes data from China’s listed manufacturing enterprises from 2018 to 2023, and applies a measurement method under conditions of imperfect competition to investigate WD-RDIA. The findings are as follows: First, WD-RDIA is widespread among China’s manufacturing enterprises, and exceeding the average wage distortion across the entire production and operation process. Second, WD-RDIA exhibits notable heterogeneity. Regarding ownership structure, WD-RDIA is most pronounced in privately-owned enterprises, followed by foreign-funded enterprises, with state-owned enterprises experiencing relatively lower levels. From industry characters perspective, WD-RDIA is most severe in capital-intensive enterprises, while it is relatively weaker in labor-intensive and technology-intensive enterprises, both of which are less affected than capital-intensive industries. Third, employment pressure has amplified enterprises’ bargaining power in wage decision-making processes, serving as an important driver of WD-RDIA. • 1.Wage distortion is widely prevalent in R&D and innovation activities. • Wage distortion in R&D and innovation activities exhibits significant heterogeneity. • Pressure from the labor market is an important contributing factor to wage distortion in R&D and innovation activities.