Labor protection and corporate labor investment efficiency - Evidence based on the implementation of the "Labor Contract Law"

Liupeng Zhao and Ke Zhang

Finance Research Letters, 2024, vol. 69, issue PA

Abstract: This research examines non-financial companies listed in China's capital market, using the “Labor Contract Law” as a natural experiment to explore how labor protection influences investment efficiency. The study provides insights into how such policies shape corporate investment behavior. Findings indicate that stronger labor protection significantly improves labor investment efficiency and the allocation of labor resources within companies. Furthermore, the positive impact on investment efficiency is more pronounced in smaller firms and non-state-owned enterprises.

Keywords: Labor protection; Corporate labor investment efficiency; Labor contract law (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324010948

DOI: 10.1016/j.frl.2024.106064

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