Research On The Effect Of FDI On Human Capital Upgrade In Yangtze River Delta

From the beginning of the Opening-Up Policy, especially joining in WTO, China has already become one of the countries who absorb the most FDI in the world. FDI plays an important role in the economic development, then how about the effect of FDI on the human capital upgrade? This paper takes the Yangtze River delta as the object, and analyses the effect of FDI on the human capital upgrade, from the view of differences among Zhejiang, Jiangsu, and Shanghai.The effect of FDI on human capital upgrade can be examined in three aspects, include human capital investment level, human capital stock level, and human capital efficienvy level. The study builds up the function models in the third chapter. After strict stationarity test, cointegration test, this paper begins to do empirical analysis in Zhejiang, Jiangsu, and Shanghai, based on the dates from 1985 to 2006. The results indicate that the effect of FDI on human capital upgrade is different in Zhejiang, Jiangsu and Shanghai, which follows as: the first is Shanghai, the second is Jiangsu, and the last is Zhejiang. Why? Then, this paper attempts to import some relevant factors to explain the results, and the factors include FDI total amount, FDI entry ways, FDI entry industries, FDI policies, and the existent human capital level. After the above analyses, this paper proposes several policy recommendations.The purpose of this paper is, through analyzing the regional disparity of the effect of FDI on the human capital upgrade in the Yangtze River delta, to propose the cooperation in the FDI work, industry distribution, and the human capital upgrade work. The cities in the Yangtze delta should absorb the FDI in more quantity, in suitable way, with optimum policy, to the suitable trade, according to one's own current situations, and thus take full advantages of the effect of FDI human capital outflow to the host country.