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Risk preference and labor income share: The equity pledge effect in digital transformation

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  • Zhao, Lingya
  • Wu, Xingtan

Abstract

Based on data from Chinese Shanghai and Shenzhen A-share listed companies from 2012 to 2024, combined with the quasi-natural experiment of the National Big Data Comprehensive Pilot Zone policy, this paper systematically examines the impact of digital transformation on corporate labor income share and its underlying mechanism. The study finds that the establishment of the National Big Data Comprehensive Pilot Zone significantly enhances corporate labor income share, confirming that digital transformation promotes the growth of corporate labor income share. Equity pledges have a significant negative moderating effect on the aforementioned relationship, rooted in the fact that controlling shareholders, to avoid the risk of forced liquidation, tend to reduce human resource investments. Human capital plays a partially mediating role between digital transformation and labor income share, as digital transformation drives corporate human capital accumulation, which in turn enhances labor remuneration share through skill premiums and knowledge contributions.

Suggested Citation

  • Zhao, Lingya & Wu, Xingtan, 2026. "Risk preference and labor income share: The equity pledge effect in digital transformation," Finance Research Letters, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:finlet:v:99:y:2026:i:c:s1544612326004484
    DOI: 10.1016/j.frl.2026.109919
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