Labor Investment Research Articles

The impact of non-financial disclosure on labor investment: International evidence

This study examines the impact of non-financial disclosure (NFD) on firms' labor investment efficiency. We analyze a broad sample of firms located across 44 countries and the period 2006–2019. Using regression analysis, the association between abnormal employment growth and environmental, social and governance (ESG) disclosure volume is evaluated. Preliminary evidence reveals that this association is, in general, negative, with NFD exerting a positive influence on labor investment efficiency. Importantly, we also find that the country's institutional and legal background modulates the association, in that the link is markedly stronger in countries with higher-quality investor protection, rule of law and anti-self-dealing devices. Finally, we document stronger effects of ESG disclosure in countries featuring higher labor market rigidities and unionization rates, even after controlling for the country institutional and legal background.

Early Canal Systems in the North American Southwest

AbstractCurrent evidence suggests that Indigenous farmers in the North American Southwest began canal irrigation in the second millennium BC, marking an important change in food production technology. Early canal systems are preserved in alluvial floodplains of the US-Mexico Borderlands region, tend to be deeply buried, and can appear as natural fluvial features. Here I discuss some of the challenges in identifying early canals and associated fields and present case studies from the Santa Cruz River in southern Arizona where buried channels dating as early as 1600–1400 BC were likely human constructed. These small channels share several stratigraphic properties and are consistent with hypotheses of early canal irrigation practiced by small family groups reliant on mixed farming and foraging. Through time, irrigation canal systems expanded in size, resulting in increased labor investment, sedentism, and productivity and facilitating the development of larger irrigation communities. Stratigraphic and geomorphic properties of early canal systems thus far identified along the Santa Cruz River provide a framework for identifying potential early canal evidence in other fine-grained floodplains of the Southwest, thereby improving our understanding of Indigenous agricultural intensification.

Killing Growth: Homicides and Corporate Investment in Brazil

We examine the effects of violent crime on corporate investment and financing decisions of Brazilian firms. Exploring city variation in homicides, we find that an increase in the growth rate of homicides is associated with significantly lower corporate investments, with lower labour investments, and with a higher likelihood of layoffs. Spikes in violent crime are also associated with more conservative financing policies, reflected in higher cash holdings, in lower R&D (research and development) expenditures, and in lower dividend payments. Homicides further affect investment efficiency and financing choices, decoupling investment from debt finance and profitability. Moreover, the negative association between homicides and investment is significantly stronger in smaller firms, which highlights the uneven costs of violent crime in reducing firm growth.

A blood cell classification method based on MAE and active learning

Cell morphology analysis is a crucial diagnostic tool for identifying blood diseases, including acute leukemia. However, the traditional analysis process is time-consuming and requires significant investment in labor and expertise from laboratory doctors. In recent years, deep learning-based automatic blood cell classification techniques have gained popularity. But acquiring image data and annotations in the medical field is often challenging and costly. With the increasing use of deep learning techniques in clinical practice, it has become vital to ensure both accuracy and high-quality annotations. To address these challenges, this paper proposes a blood cell classification method based on Masked Autoencoder (MAE) and active learning (AL), namely MAE4AL. This method utilizes the self-supervised loss of MAE and sample uncertainty to select the most valuable samples for labeling. A comprehensive comparison is conducted between our method and the state-of-the-art blood cell classification technique, which employed ResNeXt. Remarkably, our proposed approach achieves comparable classification performance to ResNeXt when utilizing only 20% of the labeled data. When employing half of the labeled data, our method achieves a classification accuracy of 96.36%, surpassing the ResNeXt model trained with 100% labeled data by 0.79%.

The effect of tax credit reporting on the efficiency of enterprise labor investment

This paper uses the data of A-share listed enterprises in Shanghai and Shenzhen from 2010 to 2022 as samples for empirical analysis. The empirical research finds that tax credit reporting has A significant positive impact on the labor investment efficiency of enterprises, and this impact is achieved by reducing the internal and external financing constraints of enterprises. In addition, the heterogeneity test results show that the labor investment efficiency of private enterprises is more likely to be affected by the change of corporate tax credit rating.

Does executives’ overseas experience improve firms’ labor investment efficiency?

Based on upper echelons theory and using a sample of private Chinese A-share listed firms from 2008 to 2020, this paper studies the impact of executives’ overseas experience on firms’ labor investment efficiency. The results show that executives with overseas experience significantly enhance firms’ labor investment efficiency. After distinguishing between different types of overseas experience, the results show that executives with only study experience or with both study and work experience abroad have a significant positive effect on firms’ labor investment efficiency, while executives with only overseas work experience have no significant effect. A cross-sectional analysis based on labor adjustment costs shows that the positive impact of executives’ overseas experience is more pronounced in labor-intensive firms, firms with a greater proportion of R&D investment and firms with a higher percentage of highly educated employees. The mechanism tests show that executives with overseas experience can optimize labor investment efficiency by lowering agency costs, attracting analyst attention and alleviating financing constraints under conditions of underemployment. This study enriches the literature on the characteristics of executive teams and the efficiency of labor investment, providing reference and inspiration for firms to attract more high-quality returnees and optimize their labor resource allocation.

Application of Remote Sensing in Desertification Monitoring

Desertification has become one of the greatest international concerns in recent decades. This study mainly focuses on the significance and necessity of applying remote sensing to improve efficiency in desertification monitoring. Results show that applications of remote sensing in desertification monitoring have shown advantages and promises of development in the future. Satellite images and unmanned aerial vehicle technology are two major sources of remote sensing data. This study also contains specific applications of remote sensing techniques, including normalized difference vegetation index (NDVI), land cover classification, and spectral mixture analysis (SMA). NDVI measures the vegetation cover to reflect potential desertification but fails to offer a comprehensive picture of the desertification status of an area. While land cover classification identifies different types of land use to monitor desertification, track changes over time, and find potential environmental stressors, the technique requires huge investments in technology and labor. SMA, the sub-pixel classification technique, provides a detailed analysis while consuming significant computing resources and time. This study also provides prospects for future developments of data acquisition and analysis approaches in desertification monitoring using remote sensing. Making suggestions on future research topics and possible methodologies, this study hopes to inspire further research in this area to better deal with the global issue of desertification.

AuDrA: An automated drawing assessment platform for evaluating creativity

The visual modality is central to both reception and expression of human creativity. Creativity assessment paradigms, such as structured drawing tasks Barbot (2018), seek to characterize this key modality of creative ideation. However, visual creativity assessment paradigms often rely on cohorts of expert or naïve raters to gauge the level of creativity of the outputs. This comes at the cost of substantial human investment in both time and labor. To address these issues, recent work has leveraged the power of machine learning techniques to automatically extract creativity scores in the verbal domain (e.g., SemDis; Beaty & Johnson 2021). Yet, a comparably well-vetted solution for the assessment of visual creativity is missing. Here, we introduce AuDrA – an Automated Drawing Assessment platform to extract visual creativity scores from simple drawing productions. Using a collection of line drawings and human creativity ratings, we trained AuDrA and tested its generalizability to untrained drawing sets, raters, and tasks. Across four datasets, nearly 60 raters, and over 13,000 drawings, we found AuDrA scores to be highly correlated with human creativity ratings for new drawings on the same drawing task (r = .65 to .81; mean = .76). Importantly, correlations between AuDrA scores and human raters surpassed those between drawings’ elaboration (i.e., ink on the page) and human creativity raters, suggesting that AuDrA is sensitive to features of drawings beyond simple degree of complexity. We discuss future directions, limitations, and link the trained AuDrA model and a tutorial (https://osf.io/kqn9v/) to enable researchers to efficiently assess new drawings.

Capital Age and Labor Investment Efficiency

This study examines how capital age affects the efficiency of corporate labor investments. Using a sample of 1,588 US firms from 1991 to 2016, we find that the efficiency of labor investments increases as technology ages. Subsample analysis on labor investment efficiency suggests that old capital decreases labor over- and underinvestment. Our results remain robust to alternative specifications and restricted to small firms and industries requiring high labor skills. These findings add to the growing literature examining how learning affects a variety of phenomena in finance. Managers' increased understanding of their capital over time facilitates the efficiency of corporate labor investments.

Creditor protection and labor investment efficiency: Evidence from China

This paper examines how strengthened creditor protection affects the real economy in view of labor investment efficiency. Exploiting the implementation of the enterprise bankruptcy law and the property law in 2007 as quasi-exogenous shocks, we find that strengthened creditor protection can reduce the deviations of labor investment from the level justified by economic fundamentals, i.e., improve labor investment efficiency. The improvement in labor investment efficiency is largely driven by the alleviation of overinvestment in labor due to under-firing. The main results are more pronounced for non-state-owned enterprises with more intermediate layers and state-owned enterprises with fewer intermediate layers in the pyramid control chains. Our overall findings indicate that strengthening creditor protection through upgrading the legal system can improve the efficiency of human capital allocation.

Non‐CEO executives' intraorganizational competition incentives and corporate labour investment efficiency

AbstractThis study examines the impact of non‐Chief Executive Officer (non‐CEO) executives' intraorganizational promotion‐based incentives, also known as tournament incentives, on corporate labour investment efficiency. We find that tournament incentives lead to inefficient labour investment, measured as the absolute deviation from optimal net hiring warranted by firm fundamentals. This positive relationship is weakened when non‐CEO executives are less eager to compete in the tournament. Mediating analysis demonstrates that reduced team cohesion, captured by non‐CEO executive turnover, mediates the relationship between tournament incentives and labour investment inefficiency. Our evidence is consistent with the dysfunctional view of tournament incentives and highlights the importance of non‐CEO executives' incentives in corporate labour investment.

Government Employment Target Pressure and Labor Investment Efficiency in China: A Political Economy Perspective

Government Employment Target Pressure and Labor Investment Efficiency in China: A Political Economy Perspective

Robot adoption and firm's capacity utilization: Evidence from China

We examine the impact of a firm's robot adoption on the capacity utilization rate for Chinese manufacturing firms between 2011 and 2019. Our result shows a significant positive relationship between a firm's robot adoption and capacity utilization rate. Further analysis finds that the main finding is only significant for non-SOEs, firms with low supply-demand balance, low-tech firms, firms in labor-intensive industries, high financial constraints firms, high-profit volatility firms, and under-hiring firms. The path analysis suggests that a firm's robot adoption improves the firm's capacity utilization rate by reducing its labor investment inefficiency. Our main result remains significant on the industrial level. Finally, the main finding held after alleviating the endogeneity concerns and several robustness tests.

Political connections and labor investment efficiency

Despite that extant literature has shown that political connections offer various advantages, it is expected that they will lead to sub-optimal investments in firms due to increased agency conflicts and information asymmetry. This paper explores the impact of political connections on labor investment efficiency. We emphasize labor investment because human capital is crucial in creating a competitive advantage for companies and is also considered by politicians. Our results indicate that political connections deteriorate labor investment efficiency in the form of labor over-investment. Thus, companies that have political connections are often inclined to hire more employees in order to leverage the advantages and privileges that come with their connections.

Business environment and productivity in Africa: macro evidence

PurposeAfrica's business environment (BE) is characteristically unfriendly and poses severe development challenges. This study evaluates the impact of business climate on productivity in sub-Saharan Africa (SSA).Design/methodology/approachMacroeconomic data for 51 sub-Saharan African economies from 1990 to 2018 are employed for the analysis. The seemingly unrelated regression model is used to address inter-sectorial linkages.FindingsThe study uncovers several findings. First, a high start-up cost substantially leads to productivity losses by limiting the funds available for investment in productivity-enhancing labour and technology and limiting the number of businesses that see the light of day. The productivity impacts of start-up costs are most enormous for industry, followed by services and agriculture. Second, economies with favourable financing environments tend to be more productive economy wide and sector wise. Third, high taxes and tax inefficiency lower productivity by reducing the resource envelope of firms, thus lowering investment amounts. Fourth, poor business infrastructure inflicts the most damage on productivity. Lastly, business administration and macroeconomic environments impact sectoral and economy-wide productivity.Practical implicationsSSA economies must strive to lower the cost of starting a business as high start-up costs injure productivity. One way of reducing start-up costs is to create a one-stop shop for registering and formalising a business. Another way is to automate business registration and administrative processes to reduce red tape and corruption.Originality/valueThe authors extend the body of knowledge by analysing sectoral and economy-wide productivity effects of various business climate indicators while accounting for inter-sectoral linkages, cross-sectional dependence and endogeneity.

Judicial independence and corporate employment: Evidence from China

We investigate how firms respond to strengthening of judicial independence by examining employment decisions following staggered judicial independence reform in China. We provide robust evidence that the reform leads to salient promotion in employee numbers. Alleviated financing frictions, increased labor demand and improved information quality are three plausible channels that allow independent judicial system to promote corporate employment. Further, we find the reform improves firms’ labor investment efficiency. We estimate that employment effect translates into economically important outcomes in innovation outputs and firm performance. Our paper provides new insights into the real effects of judicial independence on labor allocation and the economy.

Green credit policy and labor investment efficiency: evidence from China.

Green finance plays a crucial role in driving green development. By leveraging the implementation of the "Green Credit Guidelines" as a quasi-natural experiment in 2012, our study provides compelling evidence that this green credit policy enhances the efficient investment in labor. Our mechanism analysis indicates that the positive impact primarily stems from the upgrading of human capital and the mitigation of agency conflicts. Moreover, we find that the effect of the green credit policy on the efficient investment in labor by green credit-restricted firms is more pronounced when these firms face robust environmental law enforcement and operate with low labor intensity. Additionally, the enhanced investment in labor demonstrates a significant positive influence on future enterprise value. Overall, our findings underscore the significant improvement in corporate labor investment efficiency resulting from the successful implementation of the Green Credit Guidelines.

Corporate diversification and labor investment efficiency: Evidence from China

Corporate diversification and labor investment efficiency: Evidence from China

Digital transformation and labour investment efficiency: Heterogeneity across the enterprise life cycle

This study delves into the influence of digital transformation on labour investment efficiency and its varied effects across different business phases. Utilizing panel regression and the instrumental variable model, the research analyses data from China's A-share listed companies spanning 2011–2021. Findings reveal that digital transformation considerably enhances labour investment efficiency, mitigating both overinvestment and underinvestment issues. Heterogeneity analysis further indicates that digital transformation fine-tunes resource distribution, especially aiding businesses in their growth and maturity phases. Contrarily, firms in a declining phase show no discernible impact from digital transformation.

The Impact of Investments in Physical Capital, Labor, and Knowledge Capital on Enterprise Market Value: Estimation and Optimization

This study analyzes the market value of listed companies in Mainland China across different industries, including capital-intensive, labor-intensive, technology-intensive, and other industries. A generalized neoclassical investment model that considers physical capital, labor, and knowledge capital as input variables is built to theoretically decompose firm value. The empirical results indicate that knowledge capital accounts for an increasing proportion of the market value of companies, rising sharply from 21.5% in 2009 to 37.9% in 2018. In contrast, the share of labor in enterprise market value has been decreasing year by year, dropping from 56.5% in 2009 to 36.4% in 2018. The share of physical capital in enterprise market value remains relatively stable. Based on these findings, the study simulates the optimal investment behaviors and their influence on the firm value of various types of enterprises, providing valuable insights for investment decision-making for managers in different industries.