Digital Transformation, Anti‐monopoly Policy, and Corporate Income Disparity

Yunpeng Fan, Zhengnan Liu and Liansheng Zheng

China & World Economy, 2025, vol. 33, issue 6, 132-172

Abstract: Digital transformation has far‐reaching implications for income distribution within and across firms. This study explored the influence of digital transformation and anti‐monopoly policy on firm income disparity. A digital transformation index was constructed by improving dictionary‐based methods with natural language processing algorithms, and data from Chinese A‐share listed companies between 2009 and 2023 were analyzed. The results showed that: (i) digital transformation reduced intrafirm income disparity through digital influence and digital human capital, with stronger effects in firms facing fewer financing constraints or paying lower cash dividends; (ii) this disparity‐reducing effect was weaker among leading firms, although the Anti‐monopoly Guidelines strengthened it; (iii) digital transformation increased interfirm income disparity within industries by fostering monopolies in technology and talent acquisition; and (iv) the Anti‐monopoly Guidelines promoted market competition and enhanced the spillover effects of technological innovation, thereby mitigating the disparity‐increasing effect.

Date: 2025
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