The Study On The Employment Effect Of Foreign Direct Investment In Shanxi

With the rapid development of economic globalization, the size of foreign directinvestment of China has increased steadily. Foreign direct investment has created a lotof employment opportunities, and it is an increasingly significant role in alleviatingemployment pressure. Employment is always a hot field which has raised manyscholars’ attention. As one of the main goals of macroeconomic regulation and controlin our country, promoting the increase of employment is of great significance forimproving the livelihood of people to maintain social stability. Because Shanxi Provinceis in central of China, it has a low degree of opening to the outside world compared withthe coastal developed province. In the past, the academic world has a low degree ofattention on the effect of FDI on employment in Shanxi Province, and there have fewstudies about the effect relatively. Now, Shanxi Province is faced with economictransformation pressure, the employment situation is getting worse. This paper thatbases on the condition of Shanxi Province to deeply analyze the influence of FDI onemployment in Shanxi Province has important theoretical meaning and practicalmeaning.This paper uses the qualitative analysis and empirical analysis to analyze theinfluence of FDI on employment in Shanxi Province. This article has three parts.Part1has the first three chapters. Mainly synthesized to generalize and analyzeforeign classical theory about FDI and impact of FDI on employments. This hasprovided some academic support for future research. Meanwhile, this essay summarizesand analyzes the development of foreign direct investment in Shanxi Province nearlythree decades and characteristics about Shanxi Province. In terms of number ofemployment, on the one hand, FDI will create some new job opportunities by start newbusiness. On the other hand, FDI will promote economic growth and indirectly boostemployment growth through multiplier effects. But at the same time, there is some crowding-out-effect to restrain employment growth. In terms of quality of employment,FDI may produce technology spillover effect, and FDI may improve the comprehensivequality of workers and working condition.Part2is the fourth chapter. Mainly uses VAR model to quantitatively analyze theemployment effect on FDI. On the contrary, the results of impulse response andvariance decomposition show that the increase of foreign direct investment may reducethe number of employment in Shanxi Province. This is because that the degree of usingforeign capital in Shanxi Province is too late and too low and because there is a gapwith the developed coastal provinces on size and quality of FDI. The whole layout ofFDI in Shanxi Province is too concentrated to promote the employment. Actually, it hascreated crowding-out-effect. On the side of quality of employment, FDI did raise thelevel of wages and improve the whole quality of employment in Shanxi Province.Part3is the fifth chapter. Mainly put forward some corresponding policysuggestions to solve the problems of FDI development in Shanxi Province. In thatcontext, we provide a new solution to solve the employment of Shanxi Province. On theone hand, we can enhance the attractiveness of FDI by improving the environment forinvestment. And improve the investment strategy to realize the balanced development.We can introduce the advanced foreign investment style to increase the efficiency ofusing foreign investment and improve the quality of foreign investment in ShanxiProvince. Thus, we can fully exploit the potential for job creation of FDI. On the otherhand, we can absorb the advanced technology of foreign investment and managerialexperiences by increasing cooperation and exchange of between mainland companiesand foreign investment. Thus, we can promote the quality of employment and relief thecrowding-out-effect.