Theoretical And Empirical Analysis Of FDI And Employment Risk Of Labor

In twentieth Century since eighty time later period, with the advance of economicglobalization and the entering FDI, foreign direct investment and the relationshipbetween the labor market was widespread concern. Since China’s reform and openingup, FDI inflow shows rapid growth tendency. To2003our country induct FDI morethan$50billion, surpassing the United States as the world’s largest FDI host. Until2006,China remains the largest developing country in FDI.Developing vigorously the introduction of foreign capital to solve oneselfaccumulates inadequacy issues at the same time, also of the labor market obtainemployment structure effect. On one hand, the developing country exists generally ineconomic development and capital supply shortage, through introducing foreign capitalcan get over their accumulation ability of additional capital, achieve take off theeconomy target. On the other hand, an influx of foreign capital to China, has beenmainly to direct investment, especially in the Pearl River Delta and delta of the YangtzeRiver, attracted both inside and outside the province of large agriculture surplus laborforce aggregation, FDI concentrated area of high-quality skilled labor demand rises,which prompted the evolution of employment structure of labor force in china. Thisarticle through" replace effect" and" output " effect on the FDI in host generatedemployment dynamic effect to a mechanism to undertake systems analysis, taking intoaccount the upgrading of the industrial structure of labour force move between theindustry effects, this article from the time and spatial difference of level to inspect thelabor market changes.On the basis of theoretical analysis on relationship of FDI and the elasticity ofChina’s labor demand, this paper uses fixed effecting model and the provincial paneldata from2000to2008of China’s foreign investment enterprises, trying to research theimpact of FDI and the elasticity of China’s labor demand from the perspective of timeand space, theory and practice. Estimates represent that the effect of FDI on the labormarket is statistically significant, which impacts the elasticity of labor demand primarilythrough changing substitution effect of labor and other production factors(capital andthe intermediate product) and furthermore impact the stability of employment risk andemployment relationships in the labor market.