TY - JOUR
T1 - Business environment optimization and labor income share of enterprises
T2 - Evidence from China
AU - Lai, Jinming
AU - Ke, Jinjun
AU - Lin, Shuping
AU - Zhang, Pengdong
AU - Zhang, Qihao
N1 - Publisher Copyright:
© 2024 Elsevier B.V.
PY - 2024/8
Y1 - 2024/8
N2 - The external business environment in which enterprises operate is often subject to constant change. This paper explores how the business environment affects firms’ labor income share. Utilizing a micro-level dataset of China's A-share listed companies from 2010 to 2020, we find that an optimal business environment enhances the labor income share. Mechanism tests reveal that a better business environment contributes to the increase in labor income share by fostering human capital upgrading and improving labor dispute resolution. Further analysis demonstrates that the positive effect is more pronounced for firms with lower labor intensity and non-state ownership, and also for firms with coastal locations and higher institutional investor shareholdings. These findings contribute to existing literature on factors influencing labor income share and also provide valuable policy implications for promoting the development of a better business environment.
AB - The external business environment in which enterprises operate is often subject to constant change. This paper explores how the business environment affects firms’ labor income share. Utilizing a micro-level dataset of China's A-share listed companies from 2010 to 2020, we find that an optimal business environment enhances the labor income share. Mechanism tests reveal that a better business environment contributes to the increase in labor income share by fostering human capital upgrading and improving labor dispute resolution. Further analysis demonstrates that the positive effect is more pronounced for firms with lower labor intensity and non-state ownership, and also for firms with coastal locations and higher institutional investor shareholdings. These findings contribute to existing literature on factors influencing labor income share and also provide valuable policy implications for promoting the development of a better business environment.
KW - Business environment
KW - Improvement of labor dispute resolution
KW - Labor income share
KW - Upgrading of human capital
UR - http://www.scopus.com/inward/record.url?scp=85199261176&partnerID=8YFLogxK
U2 - 10.1016/j.ribaf.2024.102491
DO - 10.1016/j.ribaf.2024.102491
M3 - Article
AN - SCOPUS:85199261176
SN - 0275-5319
VL - 71
JO - Research in International Business and Finance
JF - Research in International Business and Finance
M1 - 102491
ER -