Government guidance funds and regional talent mobility: evidence from China’s floating population

Purpose The purpose of this study is to investigate the influence of government-guided funds (GGFs) on the cross-regional mobility of talent within China. The research aims to provide empirical evidence on how GGFs, as a policy tool for local economic development, attract highly educated labor and impact the distribution of human capital across different provinces. It also seeks to uncover the micro-mechanisms through which GGFs influence talent mobility, offering insights for talent strategy formulation and implementation. Design/methodology/approach The study employs a discrete choice model to analyze the impact of GGFs on interprovincial talent mobility in China using data from 2011 to 2017. It utilizes a unique dataset combining the China Migrants Dynamic Survey (CMDS) with GGF data from PrivCo. The methodology includes controlling for fixed effects and using instrumental variables to address potential endogeneity, providing a robust analysis of GGFs’ influence on talent attraction and mobility. Findings The study finds that the establishment of GGFs significantly attracts talent from other provinces, particularly in more developed cities and those closer in geographic proximity. GGFs increase job opportunities and expected income levels, thereby enhancing a city’s attractiveness to skilled labor. The impact of GGFs on talent mobility is more pronounced within the same province, suggesting that these funds effectively promote intra-provincial talent mobility and help curb the outflow of local talent. Originality/value This study offers original insights by examining the micro-mechanisms of how GGFs influence labor mobility, a perspective often overlooked in the literature. It provides valuable empirical evidence on the talent agglomeration effects of GGFs, contributing to the understanding of regional economic development strategies. The findings have practical value for policymakers seeking to leverage financial policies to attract and retain talent, fostering innovation and economic growth.