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Corporate shift from real to virtual and human capital distortion: A mechanism test with digital skill-bias

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  • Liu, Zhaoshan
  • Yang, Audrey

Abstract

Using data from Chinese A-share listed companies spanning 2011–2023, this study employs a two-way fixed effects model to empirically examine the impact of firms’ shift from real to virtual behavior on human capital distortion and its underlying mechanisms. Notably, the degree of firms’ shift from real to virtual is significantly positively correlated with human capital distortion. Mechanism tests indicate that firms with a higher degree of shifting from real to virtual exhibit stronger skill-biased characteristics in digital technology applications, which exacerbates human capital distortion. Moderation analysis reveals that media attention significantly weakens the positive relationship between shifting from real to virtual and human capital distortion. Heterogeneity analysis demonstrates that improvements in internal governance quality alleviates the human capital distortion effect induced by shifting from real to virtual.

Suggested Citation

  • Liu, Zhaoshan & Yang, Audrey, 2026. "Corporate shift from real to virtual and human capital distortion: A mechanism test with digital skill-bias," Finance Research Letters, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:finlet:v:101:y:2026:i:c:s1544612326005337
    DOI: 10.1016/j.frl.2026.110004
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