Joint governance corporate alliance and the share of labour income: Evidence from China's private firms

How does joint governance among private firms affect their income distribution? Although the existing studies have explored various factors that could influence the distribution of labour income, the impact of private firms' joint governance on it remains largely unexplored. Therefore, based on data from Chinese A-share private listed firms, this paper utilises the difference-in-differences method to investigate whether the Joint Governance Corporate Alliance (JGCA), a novel corporate joint governance instrument, affects labour income share, its magnitude if so, and the mechanism through which the impact happens. The results show that JGCA positively impacts private firms' labour income shares. This positive influence is more pronounced for ordinary workers and firms with weaker legal environments, tighter financial restrictions, and increased media attention. Moreover, the results of mechanism analysis reveal that JGCA significantly enhances private firms' internal governance and external financing capacity, thus contributing to the increase in labour income share.