Abstract
Enhancing the proportion of labor income is essential for reducing income disparity and attaining widespread prosperity. This study utilizes the difference-in-differences (DID) approach to examine the relationship, using data from A-share listed corporations from 2011 to 2022. The discovery demonstrates that implementing the Fair Competition Review System can significantly enhance the labor income shares for executives and ordinary employees within enterprises. Nevertheless, the Fair Competition Review System has a more significant impact on the pay share of ordinary employees compared to executives. Additionally, the favorable effects are attained by increasing profits and reducing financing expenses. Furthermore, the firm's ownership structure and the executives' shareholding have diverse mediation impacts. This paper enhances the current body of research on the factors influencing the proportion of income corporate employees receive. It also provides novel perspectives on examining the governance systems that can enhance their income share.
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