Employment Effect Of Bidirectional FDI In China

Since 1990 s,with the adjustment of employment structure and the rising of structural unemployment,China has faced more severe employment problems.In the past,the growth of employment in a closed economy mainly depended on domestic investment,factor flow and resource allocation,while under the open economy background,the methods to solve employment problems could be expanded to the global perspective.As a consequence,the research of employment has gradually shifted to FDI and OFDI.Unfortunately,the existed researches about effect of FDI and OFDI on employment are limited to one-dimensional perspective,which merely focus on the overall and regional differences and the results are inconsistent.In particular,the human capital factors haven't been given priority to in previous researches about industrial difference,which may fail to reflect the individual differences of different industries.For this problem,the Generalized Virtual Economy which is characterized by high intensity of human capital factor,provides a new way for the classification of industry.As a result,this paper will illustrate the employment effect of bidirectional FDI from the two-dimensional perspectives,as well as the discussion between the generalized virtual economy and real economy industry.Those above researches will help to construct development theories and policies to coordinate FDI,OFDI and employment.This paper is divided into six chapters,including theoretical basis,current development situation,mechanism of action,empirical analysis and policy implications about effect of China's bidirectional FDI on employment.The structure is as follows:Chapter 1 is the introduction part,which mainly introduces the background,the purpose and the significance of the research,as well as the specific research methods and technical route.Chapter 2 is the relevant theory and literature reviews,with a focus on the theoretical origin between the generalized virtual economy and employment and the evolution of accounting methods about generalized virtual economy.Meantime,this paper has a review about the effect of FDI on employment,the effect of OFDI on employment and the impact of FDI on OFDI.Chapter 3 describes the current development situation of China's bidirectional FDI and employment,by using the method of comparative analysis including the comparative study on the employment elasticity differences among GDP,FDI and OFDI;Comparative analysis on the development status of FDI,OFDI and employment in generalized virtual economy and real economy industry;Comparative analysis on the causal relationship between FDI and OFDI in generalized virtual economy and real economy industry.Chapter 4 is the mechanism analysis about the employment effect of bidirectional FDI in China.This paper expounds the influence mechanism of FDI and OFDI on employment and the role of human capital by means of capital and technology.Finally this part finds that FDI,OFDI and employment can promote and inhibit each other.Chapter 5 is the empirical analysis on the employment effect of China's bidirectional FDI.Using China's 2004-2014 panel data from 18 industries,this paper estimates the overall and two economic sectors' employment effect of the bidirectional FDI.Further analysis takes human capital as the threshold variable to test the threshold effect of bidirectional FDI affect the employment.Chapter 6 is the conclusion and policy recommendations.Based on the theoretical and empirical analysis,the paper gives conclusions and relevant policy implications,puts forward the innovation and research prospects.The results are as follows: China's bidirectional FDI has significant creation effects on employment.However,from the perspective of industry,the bidirectional FDI from generalized virtual economy industry has more significant complementary effects on employment than the real economy.The reason is that human capital has a significant threshold characteristic on the employment effect of bidirectional FDI.