Can Public Data Elements Increase Firms’ Labor Income Share? A Quasi-natural Experiment Based on the Establishment of Open Platforms for Public Data

【Authors】

KONG Dongmin, SHI Zheng & LIN Shuang

【WorkUnit】

KONG Dongmin, SHI Zheng （Huazhong University of Science and Technology, 430074）;LIN Shuang （Zhongnan University of Economics and Law, 430073）

【Abstract】

As a new type of production factor, data elements are regarded as indispensable for firms to achieve high-quality development in the digital age, as it can exert the multiplier effect when integrating with other production factors. With the practical development of open platforms for public data in China, public data elements are gradually permeating various fields, including production, operations, and sales, resulting in significant shifts in traditional production models. However, the availability of data elements may impact the relative position of production factors in income distribution. A critical question arises: Does the incremental supply of public data brought by the open platforms affect firms’ labor income share?
This paper addresses this question by leveraging the policy shocks from the establishment of open platforms for public data initiated by municipal governments in China since 2012. Specifically, our empirical research uses a staggered Difference-In-Differences （DID） model and the panel data of Chinese A-share listed firms from 2007 to 2022. The results show that the establishment of open platforms for public data increases the labor income share of local firms. This effect is primarily achieved through two pathways: Advancing business digitalization and stimulating corporate innovation. Further analysis reveals three key findings. （1） Open platforms for public data with higher quality have a more significant positive impact on firms’ labor income share. （2） Firms with low technological levels experience a more significant increase in labor income share due to open platforms for public data. （3） The impact of open platforms for public data is more significant in areas with restricted labor resources or mobility.The marginal contributions of this paper are as follows. First, from the perspective of income distribution by factor of production, this paper innovatively explores the role of data elements in enhancing firms’ labor income share, thereby expanding the boundaries of research on the determinants of labor income share. Second, by focusing on labor income share, this paper offers new empirical evidence on how the establishment of open platforms for public data influences firm activities. Third, using the policy shocks from the establishment of opens platform for public data, this paper investigates the impact of data elements on firms’ labor income share and how, which has enriched the research on the relationship between public data elements and labor income share, and also provides empirical evidence for corporate executives and policymakers to understand how public data affects microeconomic outcomes like firms’ labor income share.

【KeyWords】

Open Platforms for Public Data, Data Elements, Labor Income Share