Does Mixed or Embedded Output Servitization in Manufacturing Promote Employment?

A goal of developing economies is to promote manufacturing output servitization, thereby increasing jobs and optimizing employment structure. This study analyzes the impact of manufacturing enterprises’ output servitization on employment and its mechanism in the downstream value chain, based on Chinese Industrial Enterprises Database, and uses mediation and moderation effect models for empirical testing. The results show: (1) Embedded servitization in manufacturing promotes employment growth, including highly-skilled labor growth, while mixed servitization has little effect on the employment of highly-skilled labor. Overall, manufacturing output servitization promotes both the employment of highly-skilled employees and total employment growth. (2) Enterprise and environmental characteristics affect manufacturing output servitization on employment. There are significant differences in the promotional effect of manufacturing output servitization on employment when enterprise ownership, industries, regions, and scales differ. (3) Increased profits, decreased transaction costs, and increased wages are possible channels for manufacturing enterprises to promote employment growth by manufacturing output servitization. (4) The marketization and internationalization degrees play an important role in regulating the impact of manufacturing output servitization on employment. The improvement of enterprises’ marketization and internationalization degrees will allow manufacturing output servitization to play a more significant role in promoting labor employment.