Firm Financialization And Labor Income Share

The report to the 19th National Congress of the Communist Party of China(CPC)identified raising China’s per capita income as an important step toward the goal of achieving common prosperity for all people,and pointed out that "we must ensure that personal income increases in step with economic growth and labor productivity increases in step with labor remuneration increases." Therefore,it is of practical and policy significance to discuss the determinants of labor income share in today’s environment.Since 2008,the author has analyzed the labor income share of employees in domestic listed companies and found that it has not fallen but increased.Therefore,this paper links the newly emerging and rapidly developing financialization of enterprises with the growth of labor income share after 2010,and discusses the correlation between the two.This article uses the non-financial,not real estate in 2008-2020 a-share listed company data to validate the financialization and the relationship between the labor income share,with 4340 listed companies as the research object of empirical analysis,in order to get more reliable conclusions,fixed effect model,this article USES panel inspection enterprise financialization influence on labor income share,The heterogeneity of this effect among enterprises with different growth,different ownership and allocation of long and short term financial assets,as well as the transmission mechanism and action mechanism of this effect,and the use of instrumental variable method to test the endogeneity and robustness to ensure the robustness of the empirical results.Through the empirical test,the financialization of enterprises has a significant positive impact on the labor income share of workers;Financialization of enterprises has a more significant promoting effect on the share of labor income of employees in high-growth enterprises.There is heterogeneity in the impact of different ways of enterprise financialization on labor income share,and short-term financial assets are more correlated with labor income share,indicating that if the enterprise is motivated by the "reservoir",it will have a significant positive impact on labor income share of employees.The impact on state-owned enterprises is greater,because state-owned enterprises carry economic goals such as employment and have higher policy goals and development pressure.In addition,the positive relationship between financialization and labor income share is different among firms with different financing constraints,and financing constraints promote the positive correlation between financialization and labor income share.This indicates that if the enterprise is motivated by relieving the pressure of financing constraints,it will have a significant positive impact on the labor income share of employees.Financialization research results provide the enterprise to improve the worker labor income share basis,enrich the financial factors affecting micro labor income share,this article research conclusion can provide further deepen China’s financial structural reform,the supply side to build financial and effective support of the real economy system and mechanism,guide the motives of the entity enterprise by the market arbitrage to financing constraints,We will promote the healthy and rapid development of real enterprises.