Two-way employment-driving effect of manufacturing and producer services: Evidence from China

Abstract

Employment holds paramount importance in people’s lives, and the employment interaction between manufacturing and producer services plays a crucial role in steadily expanding employment opportunities, thereby achieving high-quality full employment. This paper delves into the data of A-share listed companies in China from 2012 to 2020, exploring the two-way effects of producer services on manufacturing and vice versa. The results reveal a significantly positive two-way employment-driving effect between manufacturing and producer services. Notably, the employment-driving effect of producer services is stronger than that of manufacturing enterprises. The results of the heterogeneity test based on the breakdown types of producer services and manufacturing highlight that the employment-driving effect of high-tech services on manufacturing is more prominent, approximately 2.85 times greater than that of non-high-tech services. This suggests a clear and substantial scale technology effect. Conversely, the employment-driving effect of high-tech manufacturing on producer services is found to be insignificant. In conclusion, the findings underscore the significant impact of producer services in driving manufacturing employment. It is imperative for the government to enhance its support for producer services enterprises and broaden employment opportunities within these sectors.