HOW DOES THE GOVERNMENT GUIDANCE FUND DRIVE THE UPGRADING OF CORPORATE HUMAN CAPITAL? — BASED ON THE PERSPECTIVE OF EMPLOYEE EDUCATION LEVEL

Abstract

As a pivotal policy-based financial instrument, whether government guidance funds (GGF) can facilitate human capital upgrading is essential for assessing the efficiency of fiscal capital allocation. Utilizing a sample of A-share listed companies in Shanghai and Shenzhen from 2006 to 2023, this study employs a two-way fixed effects model to examine the impact of GGF investment on employees’ education level and its underlying mechanisms. The empirical results demonstrate that GGF investment has significantly increased the proportion of highly educated talent within enterprises, a finding that remains robust across various sensitivity tests. Mechanism analysis reveals that this promotional effect stems from a certification effect prior to investment, which bolsters corporate reputation through government endorsement to attract talent. Post-investment, the funds exert resource and governance effects, indirectly optimizing human capital structures by mobilizing policy resources and incentivizing long-term innovation. Heterogeneity analysis further indicates that this effect is more pronounced among high-tech enterprises, firms with executives possessing overseas backgrounds, and those located in regions with lower market potential. This research moves beyond traditional financial performance metrics, providing micro-level evidence for optimizing the performance evaluation of GGF and advancing human capital-driven development strategies.