The Effects of FDI Liberalization on Structural Transformation and Demographic Change: Evidence from China

Bilge Erten, Jessica Leight and Lianming Zhu
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Lianming Zhu: Osaka University

No 16094, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: How does foreign direct investment (FDI) liberalization shape structural transformation and demographic change in developing countries? We provide new evidence on this question using five waves of Chinese census data between 1990 and 2015, exploiting quasi-exogenous variation in FDI liberalization induced by multiple waves of regulatory relaxation. We find that counties more exposed to liberalization experience a relative shift out of agricultural employment into manufacturing and services for both men and women. Exposure to FDI liberalization also reduces the probability of marriage, and induces a decline in the birth rate and the share of women with children.

Keywords: foreign direct investment; structural transformation; demographic change; China (search for similar items in EconPapers)
JEL-codes: F23 F63 J13 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2023-04
New Economics Papers: this item is included in nep-cna, nep-fdg and nep-int
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