Digital transformation, management efficiency and intra-firm common prosperity

Mitigating poverty is a critical task of Sustainable Development Goals (SDGs), and addressing the intra-firm income gap is crucial. This paper delves into the causal relationship between digital transformation and intra-firm income distribution, employing a two-fixed method that spans the period from 2013 to 2022. In the context of the overarching megatrend of digital transition, the findings of this study affirm that digital transformation can effectively narrow the income gap within firms. This reduction in the income disparity is likely achieved through an increase in employees' salaries coupled with a decrease in executives' remuneration. Furthermore, additional analysis confirms that digital transformation facilitates the attainment of intra-firm common prosperity by enhancing management efficiency. By harnessing the power of digital technology, firms can foster a more equitable and prosperous work environment for all stakeholders.