A Study On The Impact Of Digitalization On Total Factor Productivity In China’s Service Industry

Whether digitalization can promote the production efficiency of service industry is related to the transformation and upgrading of service industry and even China’s economy.However,empirical studies of the relationship between digitization and service sector productivity are lacking,and issues such as the impact of digitization on total factor productivity of service industry and its mechanism of action need to be further studied.Based on endogenous growth theory and transaction cost theory,this paper introduces operating costs and human capital as mediating variables,proposes research hypotheses,constructs a fixed-effects model,and uses data from listed service companies from 2010 to2020 to test whether and to what extent digitization can affect total factor productivity in the service industry,and further tests the specific paths through which digitization affects total factor productivity in the service industry.Finally,the heterogeneity of the impact of digitization on total factor productivity in the service industry is explored based on regional,industry and firm nature differences.The findings suggest that digitization can significantly contribute to the level of total factor productivity in the service sector.After alleviating the endogeneity problem,replacing key variables,removing samples with exaggerated information disclosure and adjusting the sample interval,the boosting effect of digitization on total factor productivity in the service sector remains robust.A further study finds that digitization can effectively reduce operating costs and improve human capital levels,which in turn promote total factor productivity in service firms.In addition,the heterogeneity test results show that digitalization has a greater impact on the total factor productivity of service firms in the eastern and central regions than those in the western region;digitalization improves the productivity of technology-intensive service firms more than capital-and labor-intensive service firms;and digitalization has a more significant effect on the total factor productivity of state-owned service firms than that of non-state-owned service firms.Focusing on the service industry,this paper explores the theoretical mechanisms and conducts empirical tests on the impact of digitalization on the productivity of the service industry,providing both micro-level empirical evidence on the impact of digitalization on the productivity of the service industry and an important reference for the government to precisely formulate digitalization-related policies.