Study On The Effect Of China's Direct Investment On "Belt And Road" Countries' Employment

Foreign direct investment is one of the important ways of capital flow.It not only affects the economic development of the country,but also play a profound impact on the economic development of the host country through investment activities,technology spillovers and human capital.With the "One Belt,One Road" initiative being proposed,China has continuously strengthened economic and trade cooperation with other countries,aiming at maximizing the interests of itself and the countries along the line,seeking common development and common prosperity.However,employment which is a fundamental to people's livelihood will largely reflects the level of economic development of the country.So how does China's outward foreign direct investment in countries along the "Belt and Road" affect the employment situation of the host country? This is the key issue that we needs to explore.This article will study from the following aspects:This paper starts from the perspective of the host country,and analyzes the impact of China's OFDI on its employment from the theoretical transmission mechanism and empirical test.First,by combing the literature on foreign direct investment and employment effects and summarizing the current research results,we can find that the employment effect of OFDI in the host country may be promoted or squeezed out.Secondly,it expounds the summary of China's foreign direct investment in the countries along the "Belt and Road".Then further it divide the countries along the "Belt and Road" into six regions based on geographical location,and compare and analyze the characteristics and differences of China's OFDI in these six regions.Next,using relevant theories,we can demonstrate the influence mechanism of OFDI on the employment of host countries.On this basis,the static fixed effect model and the dynamic system GMM model are constructed respectively.Selecting the panel data of the "Belt and Road" countries from 2005 to 2016 and classifying the countries along the line,then analyzed the employment effect of China's host country OFDI in the "Belt and Road" countries by comparing the whole sample and the sample.The empirical results of the static model show that China's OFDI has a positive effect on the employment of the host country,but the impact is lower than the GDP,technological progress and urbanization level of the country.Besides,the results of the sub-sample regression show that the employment effect of OFDI on different economies is different.Among them,the employment promotion effect of the developed economies is the most significant,followed by the transition economies and the developing economies.In the dynamic system GMM model,the explained variable lags the first period as an independent variable,and the GDP is set as the endogenous variable.The obtained estimation result is basically consistent with the static model.OFDI still plays a certain degree of promotion effect on the number of employment.