Impact of Fintech on labor allocation efficiency in firms: Empirical evidence from China

James Ang, Zhenli Yan, Tusheng Xiao, Chun Yuan and Jingfang Wang

Global Finance Journal, 2024, vol. 62, issue C

Abstract: Fintech has significantly influenced the traditional financial industry by introducing advanced technologies and innovative business models that have resulted in profound impacts. This study examines the effects of Fintech development on labor allocation efficiency and explores its underlying mechanisms. Using a set of Chinese A-share public firms from 2011 to 2020, we find that Fintech development plays a positive role in labor allocation efficiency, mainly by mitigating labor overinvestment. This positive effect is further reinforced by market competition. We also find that the primary pathways of this enhancement include lowering information asymmetry, mitigating agency issues, and substituting low-skilled labor. Moreover, we show that the dimensions of depth and digital integration are particularly important in improving labor allocation efficiency.

Keywords: Fintech; Labor allocation efficiency; Information asymmetry; Agency problem; Labor substitution (search for similar items in EconPapers)
JEL-codes: G00 J23 J53 O31 O35 O38 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:62:y:2024:i:c:s1044028324000838

DOI: 10.1016/j.gfj.2024.101011

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