Evidence on Paid-in Capital and Employment Size in Chinese Enterprises: From the China Enterprise Database
Year: 2025
Type: article
Abstract: Against the backdrop of building a consumption-driven society domestically, Chinese government authorities have enacted the newly revised Company Law. A growing body of scholarly research now recognizes the significance of paid-in capital in enterprises, focusing on how to regulate small and micro-enterprises to stimulate employment. Typically, a nation's workforce is distributed across two major sectors: the government sector and the enterprise sector. The enterprise sector accounts for over 90% of total employment, with employment growth relying on multiple factors including AI adoption levels and overall social productivity. Among these, paid-in capital plays a crucial role. This study utilizes micro-level data from the China Industrial Enterprise Database (2000-2006) to construct key variables measuring enterprise employment size and paid-in capital, along with multiple control variables. Employing empirical methodologies, we examine the impact of paid-in capital on employment size. Findings demonstrate that the mandatory paid-in capital requirement under the newly enacted Company Law significantly contributes to job creation, with increased paid-in capital exhibiting a statistically significant positive effect on employment expansion.
Authors: Youhao Sun, Mengyin Xu
Institution: Anhui Water Conservancy Technical College
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4413207256