Social security contributions and firms’ human capital structure: Evidence from China

This paper investigates the impact of social security contributions on firms’ human capital structure, utilizing data from listed companies in China between 2012 and 2019. The empirical results suggest that social security contributions have a significant positive impact on the human capital structure of enterprises, and this finding persists through a series of robustness tests. This enhancement effect can be explained by dynamic capability theory, which is primarily reflected in human resource development and technical resource optimization. The heterogeneity test indicates that the effect of social security contributions on the enhancement of the human capital structure is more pronounced in technology-intensive, non-state-owned, and small-scale firms. Furthermore, the advancement of the digital economy exerts a positive moderating effect, varying across different levels of human capital skills. The economic consequences analysis indicates that the enhancement of human capital structure due to social security contributions not only enhances corporate governance but also drives the improvement of regional industrial structure. To enhance social security contributions and optimize the human capital structure within firms, it is recommended that businesses focus on the impact of social security contributions and actively fulfill their responsibilities regarding these payments. Concurrently, the government should develop differentiated social security contribution policies and promote the growth of the digital economy across various regions to effectively support social security services and improve the labor capital structure.