<p>We examine the causal effect of foreign direct investment (FDI) on educational attainment through the lens of gender segregation in China. Using a comprehensive dataset for the 1985-2014 period and controlling for endogeneity, we find that a more prominent FDI presence causes higher educational attainment, particularly for women. Moreover, we show that this gender-segregated causal effect remains robust to different estimators, measurements and specifications. Overall, we uncover an important social externality of FDI that has never been explored systematically in the literature; namely, FDI generates positive spillovers on female educational attainment in its host country.</p>