This study investigates the impact of corporate digitalization on labor investment efficiency using data from Chinese listed companies (2007-2023). The findings reveal a positive association between corporate digital development and labor investment efficiency. Mechanism tests suggest that digitalization improves precise labor input judgment, accelerates employment adjustment, facilitates high-quality workforce recruitment, and enhances management oversight. The positive effect is more pronounced in firms located in regions with stronger labor protection, highly competitive industries, and non-state-owned enterprises. Digitalization mitigates both over- and underinvestment, mainly affecting hiring practices. The study contributes to the literature on labor investment efficiency determinants and offers practical insights into the role of digitalization in firm decision-making.

Youliang Yan, Maochuan Wang, Jieji Lai