The impact of digitalization on labor productivity evolution: evidence from China

Abstract

Purpose This paper aims to examine the impact and mechanism of digital development on enterprise labor productivity. In addition, this study empirically analyzes the nonlinear impact of digitalization on labor productivity. Design/methodology/approach This paper uses a fixed effect model, a mediation effect model and a panel threshold model to test the theoretical hypothesis of this study. Findings The results demonstrated that digitalization had a promotional effect on labor productivity, with approximately 18% of this effect achieved through transmission and influence on human capital. In addition, the novelty of this study lies in the discovery that digitization has an obvious nonlinear positive effect on corporate labor productivity. The results suggest that companies should increase investment in data-driven innovation capabilities, improve the implementation of digital talent training plans, improve their financing capacity and strengthen corporate internal management, while the government should provide appropriate policy support differently for various enterprises. Originality/value This study takes China’s Shanghai and Shenzhen A-share listed companies as the research object, systematically examines the impact and mechanism of digital development on enterprise labor productivity and explores the nonlinear relationship between digitalization and enterprise labor productivity, which is a new angle.