Analysis On The Effect Of Foreign Direct Investment On The Employment In Resources Exhausted City

Nowadays, the unemployment problem of resources exhausted city in China is very serious, which has effect on its social stability and the development of national economy. The foreign direct investment (FDI) has positive influence on the economic development of resources exhausted city, but when it comes to the resolving the employment problems, FDI is uncertain. So it has important academic value that studying the relations between FDI and the quantity of employment and solving the employment problems of resources exhausted city in china by making good use of FDI.This paper presents the concerning theories about FDI and employment. Based on summarizing the current studying results on the relations between FDI and employment, this paper sets a static framework of the effects on employment by FDI, and aiming at the current employment status and labors' characteristic of resources exhausted city, this paper selects the normative study method to research the employment effect of FDI in resources exhausted city. At the same time, this paper adopts the positive study method, sets a mathematic model with the Cobb - Douglas productive function and selects the data of Fuxin, the typical resources exhausted city, as sample and chooses the data from Liaoning province and China as the contrastable sample to study the relations between FDI and the quantity of employment, based on the analysis the different studying results between the samples.The normative study shows that FDI has dramatic effect on promoting employment of resources exhausted city at the beginning period; while in the medium and later term, the direct effect of FDI is becoming weaker, the positive effect of multiplier is unobvious, and it is uncertain for complementation effect, substitution effect and technological advancement effect of FDI, which means the employment effect of FDI is uncertain. The empirical study also shows that the employment quantity of the whole society dramatically rises as the increase of FDI in Fuxin, Liaoning and China at the beginning period, which means that the amount of FDI has positive effects on the promoting employment in the phase. While when it comes to the medium-term, the case of Fuxin is different from Liaoning and China, which the employment quantity of the whole society smoothly increases as the enhancement of FDI. In our opinions, this mainly blames for the single industry structure and the labors' lower quality and other factors of resources exhausted cityFinally, this paper puts forward the suggestions on resolving the employment problems of resources exhausted city by taking advantage of FDI.