The Impact Of Foreign Direct Investment On The Wage Gap Between Different Ownership Enterprises In China

Inward foreign direct investment(IFDI)has been an important engine to promote the rapid development of China's economy.In recent years,the scale of China's foreign investment attracted a record high,reaching $135 billion 600 million in 2015,becoming the world's third largest after the United States and Japan to attract foreign investment.Attracting foreign investment has always been a hot issue for experts and scholars in China,especially the introduction of foreign capital to the study of the wage gap between different industries in china.This paper focuses on the impact of IFDI on the wage gap of different ownership enterprises in China from the unique perspective of the differences in the ownership of labor force.The whole thesis is divided into two parts:theoretical research and empirical research.At the theoretical level,this paper firstly introduces the research results of international direct investment theory,wage decision theory and factor endowment theory on the problem of transnational investment and enterprise wage.Secondly,we lists the domestic and foreign experts and scholars,different views on the wage gap and the wage spillover effect of the internal and external enterprises.Then,we analyze the difference between domestic and foreign enterprises in the practice of introducing foreign capital and the different types of ownership.Finally,according to the existing literature,the paper establishes a theoretical model for the empirical test of the wage gap between domestic and foreign enterprises.In the empirical research,this paper adopts the method of combining quantitative analysis with qualitative analysis.We use the panel data of 29 provinces and cities in China from 2001 to 2015 to conduct the overall test and sample test.First,the impact of foreign investment on the wage level of different ownership enterprises in China is studied.Secondly,we divide the foreign funded enterprises into two research directions:Hong Kong,Macao,Taiwan enterprises and foreign enterprises.Due to the introduction of foreign capital in China,the spatial distribution of FDI tends to the eastern coastal areas while the proportion of foreign investment in the middle and western regions of China is at a low level for a long time.Therefore,the uneven distribution of foreign capital into the salient features will also cause a difference in the level of wage impact.Therefore,in the discussion of the sample,we divided the sample into the eastern region and the central and Western regions.Geoda software was used to test the spatial data of two areas.The empirical results show that:with the increasing scale of foreign investment,the wage gap between domestic enterprises and foreign enterprises will continue to narrow.Whether it is foreign investment or Hong Kong,Macao and Taiwan enterprises to invest in the domestic non state owned enterprises wages are higher than the state-owned enterprises.The impact of foreign investment on the wage of domestic enterprises in the eastern provinces and cities is higher than that in the central and Western regions.According to the empirical test of the main conclusions,this paper suggests that the following five aspects should be made policy recommendations:The first is to ensure that the scale of foreign investment should also pay more attention to improving the quality and structure of attracting foreign investment The second is to expand the scale of employment of foreign enterprises to enable more Chinese labor force to participate in the advanced technology level of foreign enterprises and advanced enterprise management experience and other factors of production.Third to improve the domestic non state owned enterprise employee welfare system.The rapid development of enterprises can not be separated from the continuous improvement and upgrading of the internal system.Fourth to improve the ability of China's vast central and Western regions.The effect of foreign investment on the wage spillover effect of domestic enterprises in the eastern part of china.Central and western regions can take this opportunity to attract foreign investment to promote the development of local enterprises.Fifth,to break the ownership structure of the system in order to achieve the enterprise by the enterprise Chinese chains parallel to the development of enterprise cooperation and win-win development track.