The Impact of Digital Transformation on Employee Protection

Abstract

The advent of digital transformation (DT) within Chinese listed companies has ushered in significant changes in the workplace, reshaping the dynamics of employee protection (EP). However, existing research focuses on the impact of DT on EP from the employee perspective and we want to explore the influence of DT on EP under the background of private listed companies in China. We adopt a two-way fixed-effect model and use the data of Chinese A-share-listed companies from 2010 to 2020 to analyze the impact of DT on the well-being of employees and its associated mechanism. This article analyzes the impact of DT on EP from both internal and external perspectives. By increasing external information disclosure and internal communication channels, enterprise DT enhances the pressure and ability of enterprises to fulfill employee responsibilities, thus strengthening EP. A series of robustness tests, such as instrumental variables, propensity score matching, increasing fixed effects and substituting variables, further verified our conclusion. The study further shows that these effects are more pronounced in firms with more external attention, high employee density, and visionary management. Our findings contribute significantly to the literature on DT and employee welfare by shedding light on the positive impacts of DT on EP and providing decision support for managers and policymakers.