Research On The Impact Of Capital Market Liberation On The Labor Share Of Enterprise

In November 2014,the “Shanghai-Hong Kong Stock Connect” was opened,and in December 2016,the “Shenzhen-Hong Kong Stock Connect” was also opened.Which is a milestone event in China’s opening-up process.Additionally,expanding domestic demand is an important part of forming the "domestic big cycle",and the labor share is the necessary engine for increasing domestic demand.How the capital market liberation will affect the share of labor income is related to internal and external resources interact,and the benign interaction of the "dual cycle".This article uses the "Shanghai-Shenzhen-Hong Kong Stock Connect" as a quasi-natural experiment to explore the impact of capital market liberation on the labor share,the Internal and external mechanisms and heterogeneity of the impact,which has a strong practical significance for the formation of a new development pattern and high-quality economic development.Firstly,this article systematically reviews the relevant research about capital market liberation and labor share,analyzes the historical evolution of capital market liberation and the current status of labor share.Secondly,based on market segmentation theory,liquidity hypothesis theory,and investor cognition theory,this article analyzes the impact of capital market liberation on labor share.Under the CES framework,a mathematical model is constructed to analyze mechanisms of capital market liberation on labor share from the perspectives of capital intensity and total factor productivity,and competitive research hypotheses are proposed.Then,using non-financial listed companies in the Shanghai and Shenzhen Stock Exchanges from2010 to 2021 as research samples and the "SH-SZ-HK Stock Connect" as a quasi-natural experiment,a progressive difference-in-difference model is established to explore the impact,mechanisms,and heterogeneity of capital market liberation on the labor share.Finally,based on the current situation in China and combined with research conclusions,propose countermeasures and suggestions to optimize the liberation pattern of the capital market and increase the labor share.The research results show that:(1)The capital market liberation has reduced the labor share,and after passing the robustness tests such as parallel trend test,placebo test,PSM-DID,the conclusion remains significant.(2)The research on the impact mechanism of capital market on Labor share shows that the impact of capital market opening on Labor share is achieved by improving capital intensity and Total factor productivity.The research on the impact of capital market opening on the decomposition effect of Labor share shows that the capital market opening has led to the increase of labor productivity effect rather than the increase of wage rate,leading to the decrease of Labor share.(3)The heterogeneity test indicates that the impact of capital market liberation on labor income share is influenced by the heterogeneity of regional labor rights protection,external innovation level,enterprise factor substitutability,internal control quality,financing constraints and workers’ status.Based on this,optimizing the the capital market liberation should adapt measures to local conditions and implement policies based on enterprises,so as to protect the labor share,promote the benefits of economic development to the whole people,and achieve the goal of common prosperity while continuously optimizing the mechanism of the the capital market liberation.