An Empirical Study Of The Effects Of Foreign Direct Investment On China's Employment

Since the reform and opening up to the outside world, the increasing foreign investments has played more and more important role in China's economy, so the governments of all levels have regarded the FDI more and more as an important way to resolve our country's employment problem. In this article, we choose the employment effect of FDI as the aims of the research.Based on econometric tools such as cointegration test and ADL Model, taking the economic factors such as savings and Foreign Direct Investment into account, this paper makes regression analysis on the effect of foreign direct investment on China's employment by using the data from 1985 to 2005.The analysis indicates that the direct effect of annual FDI on employment of foreign enterprises is positive and strong, meanwhile crowding-out effect of FDI on total employment is shown, but not strong; and finally the net effect of FDI on total employment is positive.