IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v74y2025ics1544612325000352.html
   My bibliography  Save this article

Social insurance contribution rates, income levels, and corporate innovation

Author

Listed:
  • Ouyang, Yuming

Abstract

This study examines the impact of social insurance contribution rates (SSR) on corporate innovation using data from on China's A-share listed firms from 2013 to 2022 and how social insurance contribution rates influence corporate innovation through income levels. The study finds that reducing SSR significantly promotes corporate innovation. Lower SSR also stimulates corporate innovation by increasing per capita disposable income, the average wage of urban unit employees, and per capita regional GDP. The study also found that the effect of lowering SSR on promoting corporate innovation is stronger in large enterprises.

Suggested Citation

  • Ouyang, Yuming, 2025. "Social insurance contribution rates, income levels, and corporate innovation," Finance Research Letters, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:finlet:v:74:y:2025:i:c:s1544612325000352
    DOI: 10.1016/j.frl.2025.106770
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325000352
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.106770?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Georgios Bampinas & Panagiotis Konstantinou & Theodore Panagiotidis, 2017. "Inequality, Demographics and the Housing Wealth Effect: Panel Quantile Regression Evidence for the US States," Working Paper series 17-01, Rimini Centre for Economic Analysis.
    2. Xu, Yujie & Wang, Yinan, 2023. "Has financial development made income more equal? – From the perspective of regional development imbalance," International Review of Financial Analysis, Elsevier, vol. 90(C).
    3. Kong, Dongmin & Yang, Yiwei & Wang, Qin, 2023. "Innovative efficiency and firm value: Evidence from China," Finance Research Letters, Elsevier, vol. 52(C).
    4. Wu, Huiwan, 2024. "How does enforcement of social insurance law minimize income gaps within firms: From a perspective of worker bargaining power," Finance Research Letters, Elsevier, vol. 62(PB).
    5. Chi, Wentao & Chen, Yun, 2021. "Employee satisfaction and the cost of corporate borrowing," Finance Research Letters, Elsevier, vol. 40(C).
    6. Zhang, Guowei, 2023. "The heterogeneous role of green finance on industrial structure upgrading - Based on spatial spillover perspective," Finance Research Letters, Elsevier, vol. 58(PC).
    7. Gupta-Mukherjee, Swasti, 2021. "When is money smart? Mutual fund flows and disposable income," Finance Research Letters, Elsevier, vol. 39(C).
    8. Zhang, Wenjie & Zhang, Na, 2023. "How corporate social responsibility affects firms' innovation capability: A perspective on information and resource effects," Finance Research Letters, Elsevier, vol. 55(PA).
    9. Pham, Ly Thi Minh & Vo, Lai Van & Le, Huong Thi Thu & Le, Danh Vinh, 2018. "Asset liquidity and firm innovation," International Review of Financial Analysis, Elsevier, vol. 58(C), pages 225-234.
    10. Lin, Kun, 2023. "The impact of intellectual property protection on business performance of high-tech enterprises: The mediating effect of political-business relations," Finance Research Letters, Elsevier, vol. 54(C).
    11. Bampinas, Georgios & Konstantinou, Panagiotis & Panagiotidis, Theodore, 2017. "Inequality, demographics and the housing wealth effect: Panel quantile regression evidence for the US," Finance Research Letters, Elsevier, vol. 23(C), pages 19-22.
    12. Yulan, Zheng & Li, Ao & Yan, Zehao & Bai, Yuxin & Chen, Sicen, 2024. "Does employee whistleblowing inhibit corporate pollutant emission," International Review of Financial Analysis, Elsevier, vol. 91(C).
    13. Hartmann, Jochen, 2023. "Impact of public demands on the performance of hedge fund activist engagements," International Review of Financial Analysis, Elsevier, vol. 87(C).
    14. Huang, Yuhong & Gao, Yajia, 2023. "Labor protection and the digital transformation of enterprises: Empirical evidence from China's social insurance law," Finance Research Letters, Elsevier, vol. 57(C).
    15. Zhang, Yin & Peng, Hongxing & Liu, Tingli & Xie, Kehuang, 2024. "Corporate innovation and analysts’ estimates of the cost of equity: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 83-101.
    16. Dou, Bin & Guo, SongLin & Chang, XiaoChen & Wang, Yong, 2023. "Corporate digital transformation and labor structure upgrading," International Review of Financial Analysis, Elsevier, vol. 90(C).
    17. Meng, Qingbin & Wang, Song & Zhong, Ziya, 2024. "The effect of directors' and officers' liabilities insurance on corporate social responsibility evidence from China," International Review of Financial Analysis, Elsevier, vol. 93(C).
    18. Chen, Suyun & Li, Zongze & Xie, Feixue & Xu, Xiaofang, 2024. "The signaling effect of local government debt: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    19. Wang, Chenxi & Deng, Xincai & Wang, Deli & Pan, Xingguang, 2024. "Financial regulation, financing constraints, and enterprise innovation performance," International Review of Financial Analysis, Elsevier, vol. 95(PB).
    20. Pang, Zhaofeng & Zhou, Ming, 2024. "Social security contributions and corporate outsourcing," Finance Research Letters, Elsevier, vol. 65(C).
    21. Pardo, Ángel, 2021. "Carbon and inflation," Finance Research Letters, Elsevier, vol. 38(C).
    22. Ullah, Saif, 2019. "Market for CEO talent, determinants and consequences," International Review of Financial Analysis, Elsevier, vol. 63(C), pages 395-405.
    23. Liu, Dongwang, 2023. "Credit corruption, government relation and corporate innovation," Finance Research Letters, Elsevier, vol. 58(PB).
    24. Zan, Haocheng & Jiang, Kailin & Ma, Jing, 2024. "Social trust, green finance, and enterprise innovation," Finance Research Letters, Elsevier, vol. 63(C).
    25. Huang, Nianbing & Liu, Yu, 2024. "Structural tax reduction, financing constraint relief and enterprise innovation efficiency," Finance Research Letters, Elsevier, vol. 60(C).
    26. Liu, Shanmin & Zhuo, Yangyuan & Shen, Xinyue & Cai, Mengda & Yang, Ye, 2023. "The impact of declined social insurance contribution rate on enterprise total factor productivity: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 87(C).
    27. Guo, Yuanyu & Xie, Wenlan & Yang, Yang, 2024. "Dual green innovation capability, environmental regulation intensity, and high-quality economic development in China: Can green and growth go together?," Finance Research Letters, Elsevier, vol. 63(C).
    28. Tang, Qi, 2023. "Labor cost and stock price crash risk: Evidence from China," Finance Research Letters, Elsevier, vol. 55(PB).
    29. Elmawazini, Khaled & Atallah, Gamal & Rafiquzzaman, Mohammed & Guesmi, Khaled, 2022. "Do regulatory policies matter to corporate innovation?," International Review of Financial Analysis, Elsevier, vol. 84(C).
    30. Rouine, Ibtissem & Ammari, Aymen & Bruna, Maria Giuseppina, 2022. "Nonlinear impacts of CSR performance on firm risk: New evidence using a panel smooth threshold regression," Finance Research Letters, Elsevier, vol. 47(PB).
    31. Ma, Chenxin & Ji, Xiang, 2024. "R&D globalization and enterprise innovation capability," Finance Research Letters, Elsevier, vol. 65(C).
    32. Anagnostopoulou, Seraina C. & Avgoustaki, Argyro, 2023. "The impact of human resource practices on corporate investment efficiency," International Review of Financial Analysis, Elsevier, vol. 87(C).
    33. Han, Wei & Wu, Di, 2024. "ESG ratings, business credit acquisition, and corporate value," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ma, Jing & He, Zhangyin, 2024. "Business environment and quality of economic development–Evidence from countries along the Belt and Road," Finance Research Letters, Elsevier, vol. 69(PA).
    2. Qiu, Weijian & Yang, Wenxuan & Qiu, Le, 2025. "Population aging, market competition and enterprise green innovation," Finance Research Letters, Elsevier, vol. 74(C).
    3. Che, Jiayi & Chen, Jinsong, 2024. "Empirical study on marketing investment and business innovation—A case analysis based on small and medium enterprises," Finance Research Letters, Elsevier, vol. 69(PB).
    4. Guo, Jing & Yu, Jiaqi & Tian, Ziqing, 2025. "Financial technology, population aging, and corporate innovation," International Review of Financial Analysis, Elsevier, vol. 100(C).
    5. Manoel Bittencourt & Shinhye Chang & Rangan Gupta & Stephen M. Miller, 2018. "Does Financial Development Affect Income Inequality in the U.S. States? A Panel Data Analysis," Working Papers 201803, University of Pretoria, Department of Economics.
    6. Galina Besstremyannaya & Sergei Golovan, 2019. "Reconsideration of a simple approach to quantile regression for panel data: a comment on the Canay (2011) fixed effects estimator," Working Papers w0249, Center for Economic and Financial Research (CEFIR).
    7. Abebe Hailemariam & Tutsirai Sakutukwa & Ratbek Dzhumashev, 2021. "Long-term determinants of income inequality: evidence from panel data over 1870–2016," Empirical Economics, Springer, vol. 61(4), pages 1935-1958, October.
    8. Huang, Yuhong, 2024. "Digital transformation of enterprises: Job creation or job destruction?," Technological Forecasting and Social Change, Elsevier, vol. 208(C).
    9. Zheng, Panpan & Li, Zhen & Zhuang, Ziyin, 2023. "The impact of judicial protection of intellectual property on digital innovation: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PA).
    10. Pang, Zhaofeng & Zhou, Ming, 2024. "Social security contributions and corporate outsourcing," Finance Research Letters, Elsevier, vol. 65(C).
    11. Ersi Athanassiou & Ekaterini Tsouma, 2017. "Financial and Housing Wealth Effects on Private Consumption: The Case of Greece," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 15(1), pages 63-86.
    12. Fang, Wei & Fang, Mian & Wang, PengHang, 2025. "State-owned equity investment funds and corporate innovation," Finance Research Letters, Elsevier, vol. 71(C).
    13. Cui, Zhuqing & Diwu, Simin, 2024. "Human capital upgrading and enterprise innovation efficiency," Finance Research Letters, Elsevier, vol. 65(C).
    14. Dimitra Kontana & Fotios Siokis, 2018. "Revisiting the Relationship between Financial Wealth, Housing Wealth, and Consumption: A Panel Analysis for the U.S," J, MDPI, vol. 1(1), pages 1-15, November.
    15. Cui, Yadong & Liang, Jun & Wang, Wei, 2025. "Social insurance contributions and labor income share—Evidence from China's Social Insurance Law," Socio-Economic Planning Sciences, Elsevier, vol. 97(C).
    16. Mihaela Nicolau, 2020. "Interest rate and the financial and housing wealth effects in ten CEEC," Economics Bulletin, AccessEcon, vol. 40(2), pages 1132-1145.
    17. Hu, Chun & He, Haoyang & Wang, Fei & SHIN, YEON-SOO, 2025. "Management equity incentives, market dynamics, and corporate R&D investment," Finance Research Letters, Elsevier, vol. 76(C).
    18. Galina Besstremyannaya & Sergei Golovan, 2019. "Reconsideration of a simple approach to quantile regression for panel data: a comment on the Canay (2011) fixed effects estimator," Working Papers w0249, New Economic School (NES).
    19. Panagiotis Konstantinou & Anastasios Rizos & Artemis Stratopoulou, 2023. "The dynamic effect of macroprudential policies on income inequality: some evidence," Economics and Business Letters, Oviedo University Press, vol. 12(3), pages 248-265.
    20. Dimitra Kontana & Fotios Siokis, 2019. "Revisiting the Relationship between Financial Wealth, Housing Wealth, and Consumption: A Panel Analysis for the U.S," Discussion Paper Series 2019_03, Department of Economics, University of Macedonia, revised May 2019.

    More about this item

    Keywords

    Social insurance contribution rate; Income level; Corporate innovation;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:74:y:2025:i:c:s1544612325000352. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.