Internal capital markets and employee wage: Evidence from China

Wenhao Tan, Xiang Li, Jianfeng Zhao, Lin Cao and Haolun Wang

International Review of Financial Analysis, 2023, vol. 88, issue C

Abstract: The existing literature mainly focuses on the economic consequences of the internal capital market at firm level, while rarely literatures explore the effect on individual perspective. Based on manually collected data of the internal capital market from 2007 to 2018 in Chinese business groups, we examined whether and how internal capital market affects the employee wage. We find that internal capital market can add the employees wage. Further, the mechanism analysis shows that internal capital market can improve the employees wage by reducing operating risks, improving capital intensity and alleviating financing constraints. Heterogeneity analysis shows that this effect is more significant for private enterprises. This paper provides useful guideline for the improvement of employee's welfare and then benefit for enhance firm productivity.

Keywords: Internal capital market; Employees wage; Operating risk; Capital intensity; Financing constraint (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:88:y:2023:i:c:s1057521923001965

DOI: 10.1016/j.irfa.2023.102680

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