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Does artificial intelligence lead to human resource slack? Evidence from China

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  • Han, Yikai
  • Huang, Yang

Abstract

The substitution effect of artificial intelligence (AI) on the labor force has been in the spotlight. Based on data of Chinese A-share listed firms, we empirically find that firms with more AI innovation tend to have higher human resource slack, especially in regions with lower education, manufacturing sectors, and among those with smaller market shares. This study highlights that firms should optimize workforce structure to fit development needs and balance technology and human capital, while employees need to enhance skills to seize AI opportunities.

Suggested Citation

  • Han, Yikai & Huang, Yang, 2025. "Does artificial intelligence lead to human resource slack? Evidence from China," Finance Research Letters, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:finlet:v:84:y:2025:i:c:s154461232501061x
    DOI: 10.1016/j.frl.2025.107803
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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