The Impact of Foreign Direct Investment on Employment Structure—A Digital Financial Inclusion Perspective
DOI:
https://doi.org/10.54097/w990n805Keywords:
foreign direct investment, employment structure, digital financial inclusion, panel threshold model.Abstract
This study examines how foreign direct investment (FDI) affects employment structure and whether digital financial inclusion mitigates this effect. Using panel data for 30 Chinese provinces from 2012 to 2022, we estimate province fixed-effects and panel threshold models. The results show that FDI significantly impedes the shift of employment toward the tertiary sector, and this finding remains robust across alternative specifications. Digital financial inclusion exhibits a single threshold effect. Its development weakens the adverse effect of FDI but does not reverse its direction. The effect of FDI also varies across regions. It is statistically insignificant in eastern and central China but significantly negative in western and northeastern China, with a larger adverse effect in the northeast. These findings suggest that policymakers should improve the quality of inward investment, strengthen digital financial infrastructure, and adopt region-specific investment policies.
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