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

Xia Chen (), Xiaolong Chen, Xiaofeng Liu and Chenglong Wang
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Xia Chen: Audencia Business School
Xiaolong Chen: Audencia Business School
Xiaofeng Liu: SCU - Sichuan University [Chengdu]
Chenglong Wang: HRBEU - Harbin Engineering University

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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.

Keywords: Corporate digital strategy; demand for employees; substitution effect; labor costs; competitiveness (search for similar items in EconPapers)
Date: 2025-08
Note: View the original document on HAL open archive server: https://hal.science/hal-05449078v1
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Published in Asia-Pacific Journal of Accounting & Economics, 2025, 32 (5), pp.854-878. ⟨10.1080/16081625.2025.2551337⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05449078

DOI: 10.1080/16081625.2025.2551337

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