From digital to real: The technology convergence and its impact on corporate employment expansion

Promoting the deep integration of digital and real economy technologies and achieving high-quality full employment are important tasks in China’s high-quality economic development strategy. Based on panel data from Chinese A-share listed firms from 2014 to 2023, this paper measures technology convergence between digital and real economy industries (TCDR) from a micro perspective and empirically examines its employment effects. The results show that, first, TCDR significantly increases employment quantity and has a non-linear effect on employment quality, and the findings remain robust after endogeneity and robustness tests. Second, the mechanism analysis shows that TCDR promotes growth in employment quantity through production scale expansion, indicating a positive linear relationship in which the creation effect outweighs the inhibition effect. Meanwhile, TCDR has a non-linear effect on employment quality, initially suppressing and then improving it through productivity improvement, factor substitution, and enhanced market competitiveness. Finally, the heterogeneity analysis indicates that the employment effects of TCDR are shaped by internal firm characteristics, such as executives’ backgrounds and digital-technology bias; external conditions, such as government subsidies and digital infrastructure; and digital knowledge sources. Firms with a stronger digital-technology bias, as well as those that absorb more digital knowledge from the digital product services sector during the TCDR process, are more likely to achieve coordinated growth in employment quantity and employment quality.