 How does digital technology adoption affect corporate employment? Evidence from ChinaYuwen Zhou and Xin Shi Economic Modelling, 2025, vol. 147, issue C Abstract: The rapid adoption of digital technologies has sparked debates about their employment effects, yet evidence from developing economies remains limited. Previous studies highlight labor market polarization, where automation disproportionately displaces low-skilled workers while benefiting high-skilled ones. Using text analysis of corporate disclosures, we measure digital adoption across Chinese firms (2010–2019) and estimate its employment impacts. A one standard deviation increase in digital adoption raises corporate employment by 5.47%, driven by shifts toward non-routine cognitive roles and higher-educated employees. Digital adoption also increases average wages but leaves labor share unchanged. Three mechanisms explain these effects: total factor productivity (TFP) gains, market share expansion, and capital deepening, with TFP contributing most strongly. These results reveal how digital technologies reshape employment structures, emphasizing the need for firms to balance technological investments with organizational adaptation to mitigate skill mismatches. Keywords: Digital technology; Automation; Employment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:147:y:2025:i:c:s0264999325000409 DOI: 10.1016/j.econmod.2025.107045 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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