Research on the impact of digital finance on labor productivity in China

Abstract

Based on the panel data of 30 provinces in China from 2011 to 2020, this paper empirically studies the impact and mechanism of digital finance on labor productivity in China by using two-way fixed effect model and mediation effect model. Research shows that digital finance can promote labor productivity. However, there are differences in the driving effects of coverage breadth, depth and digitization level of digital finance on labor productivity. In terms of the direction of its impact on labor productivity, coverage breadth and depth have a positive effect, while the digitization level has a negative effect. Moreover, there are differences in the promotion effect of digital finance on labor productivity in different regions of China. The positive effect is significant in the eastern region, the positive effect is insignificant in the central region, and the reverse effect is significant in the western region. Further research shows that innovation plays a mediating role in the improvement of labor productivity driven by digital finance. The conclusions of this paper will provide reliable empirical evidence and policy implications for improving labor productivity and promoting high-quality economic development under the background of digital economy.