Corporate digital strategy and the firm’s employment: evidence from China

Xia Chen, Xiaolong Chen, Xiaofeng Liu and Chenglong Wang

Asia-Pacific Journal of Accounting & Economics, 2025, vol. 32, issue 5, 854-878

Abstract: Digital transformation reshapes labor markets, yet firm-level employment effects remain underexplored. Using data of Chinese A-share listed firms, we investigate how corporate digital strategy affects firms’ employment. Results show that firms’ strategic development of digital technology increases total employment and reshapes workforce composition: demand rises for high-capability employees but declines for low-capability labor. Cross-sectional analyses reveal that the substitution effect is more pronounced in highly developed cities and high-education regions. Further analyses show that digital strategy raises firms’ labor costs but also enhances their productivity, product competitiveness, and profitability. Our study provides firm-level insights into technology-driven labor market evolution.

Date: 2025
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DOI: 10.1080/16081625.2025.2551337

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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