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Digital finance, labor productivity and manufacturing structural upgrading

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  • Xu, Fenghui
  • Hu, Hao

Abstract

Based on the global value chain's "Smiling Curve" theory, this paper delves into the impact mechanism of digital finance on the upgrading of the manufacturing structure using provincial panel data in China from 2014 to 2023. The results indicate that digital finance significantly promotes the extension of the manufacturing industry towards the R&D and design end as well as the servitization end, driving the process of industrial structure sophistication and rationalization. Further analysis reveals that the enabling effect of digital finance exhibits regional heterogeneity. The eastern region has already formed an innovation-driven upgrading path, while the central and western regions need to improve digital infrastructure and refine the industrial chain collaboration mechanism to unleash the multiplier effect of digital finance on the transformation of the manufacturing industry.

Suggested Citation

  • Xu, Fenghui & Hu, Hao, 2025. "Digital finance, labor productivity and manufacturing structural upgrading," Finance Research Letters, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pb:s1544612325012334
    DOI: 10.1016/j.frl.2025.107975
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    References listed on IDEAS

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