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The impact of digital finance on corporate labor productivity: evidence from Chinese-listed companies

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  • Xuan Zhang

    (Guangdong University of Technology)

Abstract

This paper investigates how digital finance affects the labor productivity of companies, as well as the intermediate mechanisms and heterogeneity of this relationship. The results show that the rapid growth of digital finance increases the labor productivity of firms, and this conclusion holds even after a series of robustness tests and endogenous treatment. The main impact mechanisms are optimizing the capital-labor ratio, increasing R&D investment, and rising free cash flow. The results also suggest that better internal human capital structure and higher firm wages are more conducive to boosting labor productivity under the influence of digital finance, however, differences in regional development and firm nature significantly weaken the effect of digital finance on increasing labor productivity. We provide effective digital finance and management strategies for firms from the labor productivity perspective.

Suggested Citation

  • Xuan Zhang, 2023. "The impact of digital finance on corporate labor productivity: evidence from Chinese-listed companies," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(3), pages 527-550, September.
    • Handle: RePEc:spr:epolin:v:50:y:2023:i:3:d:10.1007_s40812-023-00273-1
    DOI: 10.1007/s40812-023-00273-1
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    Cited by:

    1. Douglas Cumming & Zachary Glatzer & Omrane Guedhami, 2023. "Institutions, digital assets, and implications for economic and financial performance," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(3), pages 487-513, September.
    2. Lin, Baoguo & Dong, Xueqin, 2024. "Empirical Study on the Impact of Digital Finance on Commercial Credit Allocation in SMEs," Finance Research Letters, Elsevier, vol. 61(C).

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    More about this item

    Keywords

    Digital finance; Labor productivity; Corporate governance; Financing constraints; Differentiation;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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