The influence of stock market liberalization on labor investment decisions: Evidence from China

IF 4.8 2区经济学 Q1 BUSINESS, FINANCE

Pacific-Basin Finance Journal Pub Date : 2025-07-04 DOI:10.1016/j.pacfin.2025.102859

Hanying Li, Shiguang Ma, Xiaofei Pan

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Abstract

We investigate the impact of stock market liberalization on firms' labor investment decisions. Exploiting the Mainland-Hong Kong Stock Connect program as an exogenous shock and employing a staggered difference-in-differences approach with a sample of 1938 Chinese listed firms from 2010 to 2020, we find that stock market liberalization enhances labor investment efficiency by correcting both under-investment and over-investment in labors. This main effect remains robust after addressing endogeneity concerns, using alternative samples and different proxies for labor investment efficiency, and the consideration of non-labor investments. Improved stock liquidity and a more transparent information environment, which strengthen market participants' external monitoring, are the two key channels driving these improvements. Cross-sectional analyses indicate that the effect is stronger for non-state-owned enterprises (non-SOEs). Taking a broad view of labor investments, we find that stock market liberalization also fosters more employee-friendly practices through better wages and welfare. Overall, this study underscores the significant role of nationwide financial reform in shaping firms' labor investment decisions.

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股票市场自由化对劳动力投资决策的影响：来自中国的证据

我们研究了股票市场自由化对企业劳动力投资决策的影响。本文以沪港通作为外生冲击，以2010 - 2020年1938家中国上市公司为样本，采用交错差中差方法，发现股市自由化通过纠正劳动力投资不足和过度投资，提高了劳动力投资效率。在解决了内生性问题、使用替代样本和不同的劳动力投资效率代理以及考虑非劳动力投资后，这一主要效应仍然强劲。股票流动性的改善和信息环境的透明化，加强了市场参与者的外部监控，是推动这些改善的两个关键渠道。横断面分析表明，对非国有企业（non-SOEs）的影响更大。从劳动力投资的广泛角度来看，我们发现股市自由化也通过更好的工资和福利促进了对员工更友好的做法。总体而言，本研究强调了全国性金融改革在塑造企业劳动力投资决策方面的重要作用。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Pacific-Basin Finance Journal BUSINESS, FINANCE-

CiteScore

6.80

自引率

6.50%

发文量

157

期刊介绍： The Pacific-Basin Finance Journal is aimed at providing a specialized forum for the publication of academic research on capital markets of the Asia-Pacific countries. Primary emphasis will be placed on the highest quality empirical and theoretical research in the following areas: • Market Micro-structure; • Investment and Portfolio Management; • Theories of Market Equilibrium; • Valuation of Financial and Real Assets; • Behavior of Asset Prices in Financial Sectors; • Normative Theory of Financial Management; • Capital Markets of Development; • Market Mechanisms.