The Role of Capital Markets in Corporate Labor Productivity Improvement: Evidence from Public Transfer of Equity

Based on the national implementation of National Equities Exchange and Quotations, this study explores the impact of public transfer of equity on the labor productivity of micro, small and medium-sized enterprises (MSMEs). Using China-specific data on MSMEs, we find that public transfer of equity is conducive to increasing the labor productivity of MSMEs, and this effect is mainly achieved through improved financing mechanisms and improved management mechanisms. Further analysis shows that the marginal increase in labor productivity of MSMEs from public transfer of equity is stronger in enterprises with lower production inputs and those with poorer labor management, and that the increase in labor productivity from public transfer of equity is conducive to the overall efficiency of MSMEs and market expansion. Our analysis provides a possible reference for the improvement of the emerging capital market system and the development of MSMEs. JEL Classifications: G32; G34; J24.