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Shareholder bargaining power and labor income share: Evidence from a quasi-natural experiment in China

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  • Liu, Guannan
  • Wang, Anqi
  • Wang, Kedi
  • Zhao, Qiuyun

Abstract

Drawing upon the deregulation of initial public offerings (IPOs) in China, our study reveals a substantial and negative correlation between shareholder bargaining power and the labor income share. This association is particularly pronounced in companies with a higher proportion of institutional investor holdings, within more competitive industries, and those grappling with more severe financing constraints. For scholars exploring the distributive impact of capital market regulatory policies, we emphasize a cautionary note: shareholder capitalism could expedite the erosion of the labor share, potentially exacerbating inequality.

Suggested Citation

  • Liu, Guannan & Wang, Anqi & Wang, Kedi & Zhao, Qiuyun, 2024. "Shareholder bargaining power and labor income share: Evidence from a quasi-natural experiment in China," Finance Research Letters, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323012011
    DOI: 10.1016/j.frl.2023.104829
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    More about this item

    Keywords

    Shareholder bargaining power; Labor income share; Registration-based IPO system;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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