Foreign Direct Investment In The Real Wage Effect

With the deepening of Reform and Openning up of China,as well as the rapid pace of globalization,the FDI invested in China has exceeded 800 billion dollars accumulatively.Many studies indicate that FDI can not only promote the economic development,but also affect the wage level of the host country.This paper starts from the real wage,analyses FDI by building theoretical model, and finds that the FDI affects the real wage level of host countries in two aspects:one is Gross Effect which includes Direct Effect and Indirect Effect,another is Structure Effect, which enlarges the wage gap among labors.On the basis of theoretical model,this paper analyses these Gross Effect with the data of Yangtze River and Chu Chiang Delta,and finds that FDI mainly affects the real wage of the two regions above with Indirect Effect. The entrance of foreign investment promotes the real wage hike of the foreign investment concentration area of Yangtze River Delta,while it has negative effect in the foreign investment concentration area of Chu Chiang Delta.This paper is composed of four chapters:the first chapter is literature review,which introduces studies on the relationship between FDI and the wage level of host country by both foreign and domestic economists.The second chapter is current situation analysis, which introduces and analyses the FDI and real wage level in foreign investment concentration area of Yangtze River and Chu Chiang Delta.The third Chapter is theoretical model,which analyses the Gross Effect and Structural Effect on the real wage of host country by constructing economic model.The fourth chapter is of empirical analysis and policy suggestions,which checks the real wage effect of FDI in foreign investment concentration area of Yangtze River and Chu Chiang Delta,and releases relevant policy suggestions.