“Digital-driven Incentives”: The Empowering Effect of Enterprise Digital Transformation on Human Capital Property Rights Incentives

Yuan Chen, Ma Lianfu, Zhang Xiaoqing

Journal of Shanghai University of Finance and Economics Vol. 26, Issue 04, pp. 32 - 48 (2024)  DOI:10.16538/j.cnki.jsufe.2024.04.003

Summary

With the vigorous development of the digital economy, the mode of corporate value creation has changed from “product-oriented” to “customer value-oriented”. The long-term value of intellectual capital has been greatly esteemed, and the core employees who can hear the “sound of guns” have begun to move toward the center of the stage and play a more important role as builders. Therefore, how to fully activate the core employees who face users and markets in the digital age is particularly important in the fierce and turbulent business competition. Taking China’s A-share listed companies from 2014 to 2021 as the sample, this paper empirically examines the impact and mechanism of enterprise digital transformation on human capital property rights incentives. The findings indicate that enterprise digital transformation can significantly promote the construction of human capital property rights incentive system, and core employees are more likely to be included in the incentive system. Mechanism testing suggests that enterprise digital transformation mainly promotes the construction of human capital property rights incentive system by improving the governance structure, restraining managerial myopia, and increasing intellectual capital investment. Further, it is found that enterprise digital transformation significantly strengthens the incentive-oriented characteristics of human capital property right incentive system, which is mainly reflected in the introduction of various restrictions and VAM clauses. In addition, the implementation of human capital property rights incentive system improves innovation quality and corporate value, and this effect mainly comes from core employee incentives, not the management incentives. This paper reveals the empowering effect of enterprise digital transformation on the design of incentive system, providing supporting evidence for expanding the governance role of core employees, and also providing important enlightenment for improving corporate governance mechanism and realizing enterprise high-quality development in the digital economy era.

Keywords

digital transformation; human capital property rights incentives; value creation; core employees