Stringent Financial Regulation and the Upgrading of Corporate Labour Skill Structures

ABSTRACT As China's first unified financial regulatory policy, the effectiveness of the New Asset Management Regulations (NAMR) remains to be fully explored. Although existing literature has examined the economic consequences of NAMR implementation, limited attention has been paid to its impact on labour skill structures. High‐quality human capital is the core driving force behind the development of real‐sector firms' main businesses and serves as crucial evidence for evaluating the effectiveness of NAMR implementation. This study investigates the impact of NAMR on firms' labour skill structures using data from Chinese A‐share listed companies from 2014 to 2021, employing a difference‐in‐differences model. The findings indicate that NAMR implementation has promoted the upgrading of firms' labour skill structures. This effect is more pronounced in firms led by CEOs with financial backgrounds, in non‐state‐owned enterprises, and in regions with higher levels of marketization. Mechanism analysis reveals that NAMR promotes the upgrading of firms' labour skill structures through the ‘financing constraint effect’ and the ‘investment substitution effect’. Furthermore, the enhancement of labour skill structures following NAMR implementation is found to further improve firm value and productivity. These findings provide meaningful insights for policymakers and stakeholders seeking to strengthen financial regulation and promote high‐quality corporate development.