Research On The Influence And Mechanism Of FDI On Human Capital Investment Decision

FDI is an important force in promoting China's economic and social development,and it is also a key carrier of international capital flow and the diffusion of knowledge and technology.Meanwhile,knowledge spillover and technological progress brought by FDI are important sources to promote the development of labor market and the accumulation of human capital,and its impact on human capital investment decisions of local residents is a hot topic in the development economics and related fields.With the disappearance of demographic dividend,human capital is a key driving force to support high-quality economic development.As the main form of human capital investment,it is particularly important to promote individual education investment and improve educational level of citizens.This paper systematically analyzes the influence and mechanism of FDI on Chinese human capital investment decision from theoretical model and empirical research,which enriches theoretical and empirical results on FDI promoting human capital investment in the academic field,and provides a reference basis of quantitative evaluation for the influence and mechanism of FDI on human capital investment decision.Firstly,based on the literature,this paper summarizes the influence and main mechanisms of FDI on human capital investment decision,constructs a theoretical model which contains FDI enterprises and human capital investment,and analyses from the perspectives of job opportunity,wage and cultural concept.The results show that FDI could influence family budget constraints through job opportunity and wage mechanisms,thus increasing human capital investment on children.Meanwhile,the cultural concept shock brought by FDI also promotes parents to invest more on children's human capital through improving parents' educational preference for children.Secondly,bases on the industry and source country information of FDI,and the sample of 280 cities,this paper finds that:(1)FDI has a significant impact on local residents' human capital investment decision.For every 100% increase in FDI per capita,the high school enrollment rate of 15-year-olds will increase by 0.53-0.85 percentages,which is nearly0.9%-1.5% improvement,(2)job opportunity channel is an important mechanism in the influence of FDI promotes the high school enrollment rate of 15-year-olds,it could explain26%-31% of the total effect,and it is mainly derived from the increase of the job opportunity expectation of high school education,(3)wage channel could explain 8.3%-8.8% of the total effect,and it is derived from the negative wage premium effect by FDI,which reduces the opportunity cost of receiving high school education,(4)cultural concept channel could explain 10.3%-10.9% of the total effect,which verifies that human capital investment decisions of local residents have changed after the contact with foreign culture,furthermore,the results also show that the impact of cultural concept mainly derives from the reduction of parents' emphasis on thrift quality in family education,which leads the increase of risk preference on human capital investment.Finally,the paper suggests that under the background of new developing pattern,optimizing the structure and quality of FDI,increasing the investment on human capital,extending the duration of compulsory education,promoting the balanced distribution of education resources,oriented by economic development and employment,promoting fair employment environment,guiding human capital to support economic high-quality development.