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Digital transformation and enterprise external pay gap: Internal mechanism and empirical evidence

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Listed:
  • Ma, Yanxin
  • Li, Shimei
  • Huang, Shenglan

Abstract

Using data from Chinese listed companies from 2010 to 2022 and machine learning methods, we measure enterprise digital transformation (EDT) and investigate its impact on the external pay gap. This study finds that EDT significantly increases the external pay gap of employees and executives. Moreover, EDT's influence on the external pay gap is primarily due to improved intrinsic value and internal control quality. Further research identifies that widening the external pay gap improves innovation input and output.

Suggested Citation

  • Ma, Yanxin & Li, Shimei & Huang, Shenglan, 2024. "Digital transformation and enterprise external pay gap: Internal mechanism and empirical evidence," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324013254
    DOI: 10.1016/j.frl.2024.106296
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    More about this item

    Keywords

    Digital transformation; External pay gap; Intrinsic value; Internal control quality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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