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Intelligent manufacturing and the pay gap within firms

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  • Li, Yanqiong
  • Zhang, Linlang

Abstract

While intelligent manufacturing (IM) development continually impacts market competition environments and human resource management, a critical research gap persists regarding its impact on compensation structures for both executives and employees. Utilizing a quasi-natural experiment of China's Intelligent Manufacturing Pilot Project (IMPP), we examine the impact of IM on the pay gap between executives and rank-and-file employees. This paper finds that IM significantly mitigates the pay gap within firms. Mechanism tests show that IM mitigation of the pay gap occurs through corporate governance and human capital channels. The effects of IM on the pay gap within firms are more pronounced in firms with high innovation inputs, facing high product market competition, and that are non-SOEs. This paper enriches the literature on both the microeconomic consequences of IMPP and the determinants of the pay gap within firms.

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  • Li, Yanqiong & Zhang, Linlang, 2025. "Intelligent manufacturing and the pay gap within firms," International Review of Financial Analysis, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:finana:v:106:y:2025:i:c:s1057521925006489
    DOI: 10.1016/j.irfa.2025.104561
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