The Impact of Digital Justice on the Corporate Labor Income Share: Empirical Evidence from Listed Companies in the Shanghai and Shenzhen A-Share Markets

Judicial digital transformation is not only an important manifestation of adapting to the changes of the times and broader social transformation, but also a crucial component in advancing the rule of law-based business environment in the digital era. However, the existing literature has mainly examined the connotation of digital justice at the theoretical level, while offering limited empirical evidence on its economic consequences. To address this gap, this paper investigates the impact of digital justice on corporate labor income share in terms of factor income distribution. Specifically, the establishment of Internet courts is treated as a quasi-natural experiment, and the analysis draws on data for firms listed on the Shanghai and Shenzhen A-share markets from 2015 to 2022, using a multi-period DID model for empirical estimation. The findings suggest that: first, digital justice considerably increases corporate labor income share, and this inference is sustained across a battery of robustness tests; second, digital justice raises corporate labor income share by mitigating financing constraints, weakening market monopoly power, improving the structure of human capital, and strengthening the protection of employee rights and interests; third, the beneficial impact of digital justice on labor income share is particularly evident in labor intensive corporations, corporations without political connections, and corporations with weaker ESG performance. These findings advance a more thorough understanding of the role of digital justice in the micro-level pattern of factor income distribution and provide policy implications for continuously strengthening the labor income share.