Computing Power and Labor Upgrading: Evidence from China's IDC License Panel Data (2015–2024)

Computing Power and Labor Upgrading: Evidence from China's IDC License Panel Data (2015–2024) | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article Computing Power and Labor Upgrading: Evidence from China's IDC License Panel Data (2015–2024) Xuan Qu, Hao Chao This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8229513/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 12 You are reading this latest preprint version Abstract This study utilizes a newly constructed panel that aligns China's administrative registry of Internet Data Center (IDC) operating licenses with firm-level financial, employment, and patent data from 2015 to 2024 to examine the relationship between computing-power development and labor-structure upgrading. A staggered difference-in-differences design considers the initial approval of an IDC license as a quasi-exogenous shock to firms' access to computing-power infrastructure, supported by event-study estimates that validate parallel pre-trends. The findings indicate that IDC license acquisition increases the proportion of highly skilled employees by approximately 2.6 percentage points and the proportion of highly educated employees by around 3.8 percentage points, reflecting increases of 11–12 percent relative to sample means. Mediation analysis reveals that increased innovation input and output, along with enhancements in total factor productivity and labor productivity, collectively represent approximately one-third of the overall effect. Further evidence indicates a decrease in the intensity of routine tasks and an increase in non-routine cognitive tasks, aligning with task-reallocation mechanisms. Heterogeneity analysis indicates that labor-upgrading effects are more pronounced among service-sector firms, coastal firms, and those situated in key-support intelligent-computing regions. The findings indicate that computing power serves as a digital general-purpose infrastructure, transforming internal production, innovation, and task allocation to favor high-skill and highly educated labor, thus intensifying the skill-biased nature of technological change in China's digital economy. Business and commerce/Business and management Social science/Business and management Business and commerce/Economics Social science/Economics Earth and environmental sciences/Environmental social sciences Business and commerce/Information systems and information technology Social science/Science technology and society computing power digital infrastructure labor upgrading skill-biased technological change innovation China difference-in-differences Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Under Review Version 1 posted Editorial decision: Revision requested 09 Feb, 2026 Reviews received at journal 11 Jan, 2026 Reviews received at journal 05 Jan, 2026 Reviews received at journal 04 Jan, 2026 Reviewers agreed at journal 04 Jan, 2026 Reviewers agreed at journal 04 Jan, 2026 Reviewers agreed at journal 28 Dec, 2025 Reviewers invited by journal 17 Dec, 2025 Editor assigned by journal 17 Dec, 2025 Editor invited by journal 17 Dec, 2025 Submission checks completed at journal 16 Dec, 2025 First submitted to journal 15 Dec, 2025 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8229513","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Article","associatedPublications":[],"authors":[{"id":561770325,"identity":"32b6be88-f2a8-421a-99c9-3c90a35e27e1","order_by":0,"name":"Xuan 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Communications","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Nature AJ","inReviewEnabled":true,"inReviewRevisionsEnabled":false},"keywords":"computing power, digital infrastructure, labor upgrading, skill-biased technological change, innovation, China, difference-in-differences","lastPublishedDoi":"10.21203/rs.3.rs-8229513/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8229513/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis study utilizes a newly constructed panel that aligns China's administrative registry of Internet Data Center (IDC) operating licenses with firm-level financial, employment, and patent data from 2015 to 2024 to examine the relationship between computing-power development and labor-structure upgrading. A staggered difference-in-differences design considers the initial approval of an IDC license as a quasi-exogenous shock to firms' access to computing-power infrastructure, supported by event-study estimates that validate parallel pre-trends. The findings indicate that IDC license acquisition increases the proportion of highly skilled employees by approximately 2.6 percentage points and the proportion of highly educated employees by around 3.8 percentage points, reflecting increases of 11\u0026ndash;12 percent relative to sample means. Mediation analysis reveals that increased innovation input and output, along with enhancements in total factor productivity and labor productivity, collectively represent approximately one-third of the overall effect. Further evidence indicates a decrease in the intensity of routine tasks and an increase in non-routine cognitive tasks, aligning with task-reallocation mechanisms. Heterogeneity analysis indicates that labor-upgrading effects are more pronounced among service-sector firms, coastal firms, and those situated in key-support intelligent-computing regions. The findings indicate that computing power serves as a digital general-purpose infrastructure, transforming internal production, innovation, and task allocation to favor high-skill and highly educated labor, thus intensifying the skill-biased nature of technological change in China's digital economy.\u003c/p\u003e","manuscriptTitle":"Computing Power and Labor Upgrading: Evidence from China's IDC License Panel Data (2015–2024)","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-12-19 15:27:48","doi":"10.21203/rs.3.rs-8229513/v1","editorialEvents":[{"type":"communityComments","content":0},{"type":"decision","content":"Revision requested","date":"2026-02-09T22:29:13+00:00","index":"","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2026-01-11T09:09:25+00:00","index":"hide","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2026-01-05T09:58:10+00:00","index":"hide","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2026-01-04T14:45:06+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"301843205867037574355478816027263445999","date":"2026-01-04T12:57:07+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"6435807597181793687474074736835130748","date":"2026-01-04T07:27:07+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"56355381030589100385033057875152691015","date":"2025-12-28T07:04:42+00:00","index":"hide","fulltext":""},{"type":"reviewersInvited","content":"","date":"2025-12-17T08:37:00+00:00","index":"","fulltext":""},{"type":"editorAssigned","content":"","date":"2025-12-17T08:35:36+00:00","index":"","fulltext":""},{"type":"editorInvited","content":"","date":"2025-12-17T08:27:27+00:00","index":"","fulltext":""},{"type":"checksComplete","content":"","date":"2025-12-16T12:12:03+00:00","index":"","fulltext":""},{"type":"submitted","content":"Humanities and Social Sciences Communications","date":"2025-12-15T08:09:32+00:00","index":"","fulltext":""}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"humanities-and-social-sciences-communications","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"palcomms","sideBox":"Learn more about [Humanities \u0026 Social Sciences Communications](http://www.nature.com/palcomms/)","snPcode":"41599","submissionUrl":"https://submission.springernature.com/new-submission/41599/3","title":"Humanities and Social Sciences Communications","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Nature AJ","inReviewEnabled":true,"inReviewRevisionsEnabled":false}}],"origin":"","ownerIdentity":"70cb7874-c703-42d8-bede-767313b6db34","owner":[],"postedDate":"December 19th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"under-review","subjectAreas":[{"id":59817493,"name":"Business and commerce/Business and management"},{"id":59817494,"name":"Social science/Business and management"},{"id":59817495,"name":"Business and commerce/Economics"},{"id":59817496,"name":"Social science/Economics"},{"id":59817497,"name":"Earth and environmental sciences/Environmental social sciences"},{"id":59817498,"name":"Business and commerce/Information systems and information technology"},{"id":59817499,"name":"Social science/Science technology and society"}],"tags":[],"updatedAt":"2026-03-11T02:23:31+00:00","versionOfRecord":[],"versionCreatedAt":"2025-12-19 15:27:48","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-8229513","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-8229513","identity":"rs-8229513","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}