Labor protection and enterprise diversification: Insights from a natural experiment based on the 'Social Insurance Law'

Fengling Ma, Yong Xiang and Yao Wei

Finance Research Letters, 2025, vol. 76, issue C

Abstract: This study examines the effect of the 2011 "Social Insurance Law" on corporate diversification using the difference-in-differences approach. The empirical results indicate that the enactment of the Social Insurance Law significantly enhances the extent of diversification within enterprises. Mechanism tests further demonstrate that this policy indirectly facilitates the enhancement of enterprise diversification by boosting labor productivity. Moreover, the heterogeneity analysis shows that the Social Insurance Law's positive impact on corporate diversification is more significant for private enterprises.

Keywords: Labor protection; Enterprise diversification (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325001035

DOI: 10.1016/j.frl.2025.106838

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