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

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Listed:
  • Erten, Bilge

    (Northeastern University)

  • Leight, Jessica

    (International Food Policy Research Institute)

  • Zhu, Lianming

    (Osaka University)

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.

Suggested Citation

  • Erten, Bilge & Leight, Jessica & Zhu, Lianming, 2023. "The Effects of FDI Liberalization on Structural Transformation and Demographic Change: Evidence from China," IZA Discussion Papers 16094, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16094
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    More about this item

    Keywords

    foreign direct investment; structural transformation; demographic change; China;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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