Labor Rights And FDI ——An Empirical Study Based On Provincial Panel Data

As an important channel to integrate into globalization,foreign direct investment（FDI）is an important driving force for China’s rapid economic growth and an important channel for China’s international trade.The issue of labor rights is an important issue in international trade,and many developed countries even directly link it with FDI.In recent years,the frequent occurrence of labor disputes in China has threatened social stability,and the problem of labor rights in China has reached a serious point that cannot be ignored.A large number of literatures have investigated the influence of market size,industrial agglomeration effect,policy regulation,investment cost and other factors on FDI location selection,but few studies have explored the relationship between labor rights and FDI in depth.To study this relationship is of urgent practical significance for China to attract more FDI and continue to open wider to the world.Through sorting out the previous literature,it is found that:（1）Labor rights can be roughly divided into political labor rights and economic labor rights.Political labor rights are mainly international core labor standards,namely,prohibition of forced labor,freedom of association and protection of organization,prohibition of discrimination and prohibition of child labor.Economic labor rights are mainly salary and safety security.（2）The influencing factors of FDI location selection are mainly cost factors,market factors,political factors and technical factors,the ascension of labor rights will lead to higher costs,stronger labor forces and greater market scale,more stable social order,more advanced technology productivity and better corporate reputation,so as to impact on FDI.（3）The transnational research on the influence of labor rights on FDI inflow mainly used the political labor rights index,while the research on China mainly used the single economic labor rights index.In recent years,China’s labor rights and FDI have obvious progress and improve,but there are still a series of problems:（1）The wages has rising gradually,the occupational accidenthas been gradually reduced,but there are still contradictions case quantity increased year by year,labor security treaty is in small number signatures and poor executive conditions,labor rights level gaps between regions are wide.（2）China’s FDI inflow scale continues to expand and FDI industrial structure continues to optimize,but there are still problems such as unbalanced investment regions,unreasonable investment industries and single investment sources.In this paper,the minimum wage and the proportion of occupational injury are used to measure the labor rights in China,and the provincial panel data from 2006 to2017 are used for quantitative analysis.The results show that:（1）The minimum wage has a positive impact on FDI inflow in China.The coefficient was 0.937,which was significant at the statistical level of 5% and salary increase is conducive to FDI inflow.The proportion of occupational injury has no significant influence on FDI in China,and there is no correlation between safety security and FDI.（2）The minimum wage has a positive impact on FDI in the eastern regions,while the central and western regions have no significant impact.The proportion of occupational injury has no significant influence on FDI in all regions.（3）The minimum wage has no significant impact on FDI flowing to the primary industry,but has a negative impact on the FDI flowing to the secondary industry,and has a positive impact on the FDI flowing to the tertiary industry;The proportion of occupational injury has no significant impact on the FDI to the tertiary industry.（4）The minimum wage has a positive effect on FDI from Hong Kong,Macao and Taiwan,no significant effect on FDI from non-Hong Kong,Macao and Taiwan;while the proportion of occupational injury has no significant influence on FDI from Hong Kong,Macao and Taiwan and non-Hong Kong,Macao and Taiwan.This paper puts forward policy suggestions on how to protect labor rights and continuously introduce FDI:（1）Raise the salary and strengthen the safety security;（2）Balance the regional distribution of FDI and adjust the industrial structure of FDI;（3）Expand market scale,promote technological progress and maintain social stability.