How Does Intelligent Manufacturing Improve Labour Income Share: A Quasi-Natural Experiment in China

As the core driver of Industry 4.0, intelligent manufacturing (IM) spearheads a paradigm shift in production by leveraging artificial intelligence (AI) and other advanced technologies. Using panel data of Chinese A-share listed manufacturing firms from 2010 to 2023 and applying a multi-period difference-in-differences model with the IM Pilot Policy (IMPP) as a quasi-natural experiment, this study empirically identifies a causal relationship between the IM and corporate labor income share. The findings show that the IMPP significantly increases corporate labor income share, and this effect is predominantly driven by the intelligence attribute rather than the automation attribute. Mechanism analysis reveals two channels through which IM raises firms’ labor income share: upgrading the skill structure and narrowing the skill premium. Heterogeneity research further indicates that the beneficial impact of IM on labor income share is particularly significant in firms with low market power, within technology-intensive industries, and in regions with higher minimum wages. Collectively, this study provides novel evidence on how AI-driven transformations in the manufacturing industry affect income distribution.