ВПЛИВ ПІІ НА ЗАЙНЯТІСТЬ В УМОВАХ ЦИФРОВІЗАЦІЇ ЕКОНОМІКИ: ПРИКЛАД КИТАЮ

Abstract

The paper investigates how the evolution of the digitalization of economies alters the influence of foreign direct investment (FDI) on employment, using China as a case study. The study focuses on China, the largest developing economy, which has a significant influence on other economies, including Ukraine. With technological shifts demanding more skilled labor, particularly within the rapid growth of the digital economy, new pathways emerge regarding how foreign investment affects the host country's job market. The development of the digital economy can reduce the costs of information retrieval, production, transactions and delivery, etc. Beyond altering organizational practices, digital technologies also impact broader social dynamics. Understanding and leveraging digital transformation require consideration of both dimensions. To examine these aspects, a set of indices was employed, estimating digital economy development through entropy estimation and the coefficient of variation. These measurements formed the basis for a digital economy development index, utilizing indicators from four digitalization sectors: digital infrastructure, industry, innovation, and tool utilization. An empirical regression model integrated multiple indicators, such as employment rate, GDP, FDI, digitization coefficient, human capital, export rates, wages, and the proxy of interaction between FDI and the economy's digitization coefficient. Different sectors and regions within China were separately studied. Analyzing panel data across 30 Chinese provinces from 2001 to 2021 revealed that increased digitalization amplifies the positive impact of FDI inflows on domestic employment. Notably, this effect is more prominent in the service sector than in manufacturing, and it's relatively stronger in the less developed western provinces compared to the eastern and central ones. As the digital economy in the western regions is less mature, investments there yield relatively higher returns. These findings support the notion that employment grows alongside rising FDI inflows. However, it's crucial to highlight that digitalization increasingly shapes the intensity of FDI's influence on employment.