How Does Enterprises’ Digital Transformation Impact the Educational Structure of Employees? Evidence from China

Abstract

Digital transformation has had extensive impacts on enterprises and increased the concern that employees will be replaced by digital technologies. Achieving sustainability at the human resource level is a problem for enterprises. In this case, improving academic qualifications is regarded by most Chinese employees as an approach to improving their competitive advantages. Based on the panel data of China’s listed enterprises from 2014 to 2020, the twice fixed effects (TWFE) and continuous difference-in-differences (DID) methods are used to study the impact of enterprises’ digital transformation on employees’ educational structure (EES). The results show that enterprises’ digital transformation has a significantly positive impact on EES. For enterprises, specifically, the digital transformation increases the demand for employees with undergraduate degrees and reduces the demand for employees with high school degrees and below. The above results remain significant after controlling for endogeneity. However, the impact of digital transformation on employees with graduate degrees and above and associate degrees is not significant. We explain the above phenomena from the technological change assumption, the concept of human capital specificity, and the resource-based view. Results in this study provide references for employees to balance study or find a job and are beneficial for enterprises seeking to take advantage of digital transformation. Furthermore, the results can provide suggestions for achieving sustainability at the human resource level for enterprise development.

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“…Employee education level (EDU). Drawing on previous research [41,43], the percentage of employees with a bachelor's degree or higher was used to represent the educational structure. To some extent, this indicator reflects the proportion of highly educated employees in a company.…”

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