Institutional investor site visits and AI-skilled labor demand: Evidence from millions of online vacancies

We examine whether institutional investor site visits shape firms’ demand for AI-skilled labor using granular Chinese firm-level data and millions of online job postings. We find that institutional investor site visits are associated with a significant increase in firms’ demand for AI-related labor. This effect is more pronounced among firms facing higher labor cost pressure, greater labor investment inefficiency, and higher agency costs, consistent with labor reallocation and monitoring-based mechanisms. Furthermore, we document that the effect is disproportionately stronger for firms with foreign institutional participation, higher foreign ownership, and greater exposure to cross-border capital markets. We also find that investor site visits are associated with significant increases in AI innovation, AI-related discussion in financial reports, and improvements in investment efficiency. Overall, our findings provide the first evidence that institutional investor engagement influences workforce composition, highlighting a novel channel through which financial markets shape firms’ adaptation to technological change.