Digital Transformation and Corporate Human Capital Upgrade
YE Yongwei, LI Xin, LIU Guanchun
School of Public Economics and Administration, Shanghai University of Finance and Economics; School of Business, Shanghai University of Finance and Economics; Lingnan College, Sun Yat-sen University
Summary:
In recent years, China's digital economy has grown with the rapid development in emerging technologies. According to the 2021 White Paper on the Development of China's Digital Economy by the China Academy of Information and Communication Technology, the digital economy demonstrated strong resilience despite the global economic downturn caused by the COVID-19 pandemic in 2020 and contributed 38.6% to China's GDP growth. In March 2021, the outline of the 14th Five-Year Plan proposed accelerating the building of a digital economy, digital society and digital government to drive overall changes in production, lifestyle and governance. The digital economy is gathering momentum and is now a part of China's national strategy. In this context, enterprises have wholeheartedly embraced digital transformation, trying to integrate information technology with the traditional modes of production and operation. Academic researchers are also focusing on topics related to the digital transformation of enterprises. Studies have examined the impact of digital transformation on specialization and division of labor, business performance, productivity and input-output efficiency. However, the literature does not discuss the impact of digital transformation on the human capital of an enterprise. Therefore, this study fills a gap in the literature by focusing on this topic. This study argues that digital transformation relies on the application of intelligent equipment to automate many routine and repetitive tasks through computer programming, which reduces the demand for low-skilled labor in enterprises, and shows the technology substitution effect of digital transformation. In contrast, integration of digital technology with an enterprise's production and operation activities also leads enterprises to deepen their capital. For example, enterprises may purchase more advanced machinery and office automation systems and accordingly improve the level of independent research and development of technology. These changes lead to the creation of many new high-skilled jobs and increase the ability of an enterprise to attract highly skilled manpower. This shows the technology complementarity effect and the scale expansion effect of digital transformation. Therefore, this study investigates whether and how digital transformation affects the upgrading of enterprise human capital. This study tests the effect of digital transformation on enterprise human capital structure and finds that digital transformation significantly optimizes the human capital structure of enterprises. This conclusion remains valid after accounting for model endogeneity, replacing the core variables, adjusting the model setting and changing the sample size. The mechanism test confirms that digital transformation significantly increases the fixed asset investment and R&D expenditure of an enterprise and its scale of operations. Thus, digital transformation mainly optimizes the human capital structure of enterprises through its technology complementarity and scale expansion effects. The results of heterogeneity analysis demonstrate that the optimization effect of digital transformation on enterprise human capital structure is more prominent in enterprises with less financing constraints and lower technology intensity and enterprises located in the eastern region than in enterprises with more financing constraints and higher technology intensity and enterprises located in other regions. The results of further analyses indicate that digital transformation increases the remuneration of executives and other employees and the operating efficiency of enterprises. This study makes the following contributions. First, it enriches the literature in the related fields. This study reveals the economic consequences of digital transformation and extends the literature by examining the relationship between AI and labor hiring by enterprises. Second, it provides new empirical evidence indicating how to optimize enterprise human capital structure. This study analyzes how digital transformation optimizes enterprise human capital structure by focusing on the technology substitution, technology complementarity and scale expansion effects of digital transformation. It provides empirical evidence for the change in labor employment structure in a digital economy. Third, the findings of this study have important practical implications. This study shows that digital transformation prompts enterprises to demand more highly skilled labor, and this effect varies according to the characteristics of industries and regions. These findings can provide a practical reference and theoretical basis for the government to formulate more targeted policies for digital economy development.
叶永卫, 李鑫, 刘贯春. 数字化转型与企业人力资本升级[J]. 金融研究, 2022, 510(12): 74-92.
YE Yongwei, LI Xin, LIU Guanchun. Digital Transformation and Corporate Human Capital Upgrade. Journal of Financial Research, 2022, 510(12): 74-92.
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