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

Xia Chen; Xiaolong Chen; Xiaofeng Liu; Chenglong Wang

doi:10.1080/16081625.2025.2551337

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

Xia Chen
, Xiaolong Chen
, Xiaofeng Liu
, Chenglong Wang^*

^*Corresponding author for this work

College of Business

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

1 Citation (Scopus)

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. © 2025 City University of Hong Kong and National Taiwan University.

Original language	English
Pages (from-to)	854-878
Number of pages	25
Journal	Asia-Pacific Journal of Accounting & Economics
Volume	32
Issue number	5
Online published	26 Aug 2025
DOIs	https://doi.org/10.1080/16081625.2025.2551337
Publication status	Published - Sept 2025

Funding

This study is supported by the Research Center for FinTech and Digital-Intelligent Management, Shenzhen University. It is also supported by the Chinese National Natural Science Foundation [Grant number: 72202233], Hubei Provincial Department of Education Science and Technology Research Project [Grant number: B2024248], and the Fundamental Research Funds for the Central Universities of Zhongnan University of Economics and Law [Grant number: 2722025DL017].

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 4 Quality Education
SDG 8 Decent Work and Economic Growth

Research Keywords

competitiveness
Corporate digital strategy
demand for employees
labor costs
substitution effect

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10.1080/16081625.2025.2551337

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Cite this

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title = "Corporate digital strategy and the firm{\textquoteright}s employment: evidence from China",

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{\textquoteright} employment. Results show that firms{\textquoteright} 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{\textquoteright} labor costs but also enhances their productivity, product competitiveness, and profitability. Our study provides firm-level insights into technology-driven labor market evolution. {\textcopyright} 2025 City University of Hong Kong and National Taiwan University.",

keywords = "competitiveness, Corporate digital strategy, demand for employees, labor costs, substitution effect",

author = "Xia Chen and Xiaolong Chen and Xiaofeng Liu and Chenglong Wang",

year = "2025",

month = sep,

doi = "10.1080/16081625.2025.2551337",

language = "English",

volume = "32",

pages = "854--878",

journal = "Asia-Pacific Journal of Accounting \& Economics",

issn = "1608-1625",

publisher = "Taylor \& Francis",

number = "5",

}

TY - JOUR

T1 - Corporate digital strategy and the firm’s employment

T2 - evidence from China

AU - Chen, Xia

AU - Chen, Xiaolong

AU - Liu, Xiaofeng

AU - Wang, Chenglong

PY - 2025/9

Y1 - 2025/9

N2 - 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. © 2025 City University of Hong Kong and National Taiwan University.

AB - 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. © 2025 City University of Hong Kong and National Taiwan University.

KW - competitiveness

KW - Corporate digital strategy

KW - demand for employees

KW - labor costs

KW - substitution effect

UR - https://www.scopus.com/pages/publications/105014143127

UR - https://www.scopus.com/pages/publications/105014143127#tab=impact

U2 - 10.1080/16081625.2025.2551337

DO - 10.1080/16081625.2025.2551337

M3 - RGC 21 - Publication in refereed journal

SN - 1608-1625

VL - 32

SP - 854

EP - 878

JO - Asia-Pacific Journal of Accounting & Economics

JF - Asia-Pacific Journal of Accounting & Economics

IS - 5

ER -

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

Abstract

Funding

UN SDGs

Research Keywords

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