The impact of digital-oriented mergers and acquisitions on enterprise labor demand

Peng Liang, Lin Liang and Xinhui Tang

International Review of Financial Analysis, 2024, vol. 96, issue PB

Abstract: Digital-oriented mergers and acquisitions (DOMA) are increasingly being adopted as strategic options by enterprises during digital transformation. They represent a crucial pathway for enterprises to transition from traditional to digital capabilities and enhance their digital competitiveness. Utilizing data from Chinese A-share listed companies from 2010 to 2020, this study thoroughly examines the relationship between DOMA and corporate labor demand, as well as the underlying mechanisms. Our findings reveal that DOMA positively impacts labor demand. Additionally, DOMA increases the proportion of highly educated and skilled labor forces, thereby amplifying the impact of human capital. Mechanism research further shows that DOMA enhances market synergies, thereby boosting labor demand. Moreover, heterogeneity analysis suggests that the positive effect of DOMA on labor demand is particularly pronounced in enterprises with lower market shares, lower M&A premiums, higher market competition, non-high-tech enterprises and higher financial risk. This paper not only expands the research on DOMA and corporate labor demand, but also provides significant practical implications for generating new labor demand, catalyzing the intelligent transformation of enterprises.

Keywords: Digital-oriented mergers and acquisitions; Labor demand; Labor structure; Market synergies (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:96:y:2024:i:pb:s1057521924007105

DOI: 10.1016/j.irfa.2024.103778

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