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Study on the Impact of China's Manufacturing Digital Transformation on Attracting Foreign Investment

Author

Listed:
  • Nan Yan
  • Junli Yu

Abstract

Drawing on Asian Development Bank Input-Output Table Database and provincial-level manufacturing panel data from China spanning 2002 to 2023, this paper examines the impact mechanisms and effects of manufacturing digital transformation on attracting foreign investment. Findings reveal that digital transformation significantly enhances the attractiveness of the manufacturing sector to foreign capital by boosting production efficiency. This effect exhibits pronounced regional heterogeneity, being relatively significant in central China while remaining insignificant in eastern and western regions. Mechanism tests further validate the mediating roles of technological innovation and human capital structure upgrading in manufacturing digital transformation. Based on these findings, the paper proposes recommendations including- continuously advancing digital transformation, strengthening technological investment and talent development, and implementing differentiated regional policies. These measures aim to optimize the structure of foreign investment and propel China's manufacturing sector toward higher-end segments of the global value chain.

Suggested Citation

  • Nan Yan & Junli Yu, 2026. "Study on the Impact of China's Manufacturing Digital Transformation on Attracting Foreign Investment," International Business Research, Canadian Center of Science and Education, vol. 19(1), pages 1-47, February.
    • Handle: RePEc:ibn:ibrjnl:v:19:y:2026:i:1:p:47
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    References listed on IDEAS

    as
    1. Flavio Calvino & Chiara Criscuolo & Luca Marcolin & Mariagrazia Squicciarini, 2018. "A taxonomy of digital intensive sectors," OECD Science, Technology and Industry Working Papers 2018/14, OECD Publishing.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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