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Labor protection and enterprise diversification: Insights from a natural experiment based on the 'Social Insurance Law'

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  • Ma, Fengling
  • Xiang, Yong
  • Wei, Yao

Abstract

This study examines the effect of the 2011 "Social Insurance Law" on corporate diversification using the difference-in-differences approach. The empirical results indicate that the enactment of the Social Insurance Law significantly enhances the extent of diversification within enterprises. Mechanism tests further demonstrate that this policy indirectly facilitates the enhancement of enterprise diversification by boosting labor productivity. Moreover, the heterogeneity analysis shows that the Social Insurance Law's positive impact on corporate diversification is more significant for private enterprises.

Suggested Citation

  • Ma, Fengling & Xiang, Yong & Wei, Yao, 2025. "Labor protection and enterprise diversification: Insights from a natural experiment based on the 'Social Insurance Law'," Finance Research Letters, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325001035
    DOI: 10.1016/j.frl.2025.106838
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