The Empirical Study Of FDI' Impact On The Wage Gap Of Manufacturing Industry In China

When foreign direct investment (FDI) comes into the host country, it could not only create amount of employment opportunities to influence the total wage level of host country's labour market, but also could influence wage levels of workers with different skill-levels because of its advanced technology and management experience.Foreign scholars's research about FDI's influence on host country's wage levels has changed from macro-aspect to micro-aspect, and has experienced a change from research on country, area and industry levels to research on enterprise level. Meanwhile, China's scholars mainly investigate FDI's impact on wage gap from an aspect of country and areas. Domestic scholars has put little attention on FDI's wage research from an aspect of segmented industries. Based on this fact, this paper refers to the theory of relative labor demand and supply, analyzes FDI's influence on wage level and finally results that FDI could influence wage gap through influencing direct labor demand, technology preference and indirect technology spillover. Empirically, this paper tests FDI's influence on wage gap between skillful workers and unskillful workers and the industry feature of such influence, using panel data of segmented industries of manufacturing industry from 2001 to 2008. The empirical result demonstrates as follows: generally, FDI has enlarged our country's wage gap between skillful workers and unskillful workers; but specifically, FDI has reduced that gap between two types of workers in labor-intensive industry while has the opposite impact on capital-intensive industry. This paper's research also has discovered that the influence of skillful workers'supply and research investment on wage gap exceeds FDI's influence. All this results provide reference sense for reasonably inviting FDI: to reduce wage gap, our country must base on our economy reality to integrate short-term and long-term interests, control the area-orientation and industry-orientation of FDI, and invest more on human resources and technology research to increase skill level of workers.