The Effect Of Foreign M&A On Local Employment

As the biggest livelihood,employment is an important support for stabilizing the economic market.Doing a good job in employment is the key to achieving ’six stability’ and ’six guarantees’.The impact of the previous financial and economic crisis on the economy was mainly on the demand side,while the novel coronavirus pandemic since 2020 has hit both the supply and demand sides,rural and urban areas,with domestic demand plummeting and foreign orders plummeting.Many enterprises are difficult to survive,resulting in a severe employment situation.In this context,the government focuses on solving the employment problem,and maintaining employment stability is one of the government’s policy objectives.In the report of the 20 th National Congress of the Communist Party of China,it is pointed out that China will continue to promote the development of economic globalization,promote bilateral,regional and multilateral cooperation,jointly create a favorable development environment,focus on the introduction and use of foreign capital in the opening up policy,and further open up foreign capital mergers and acquisitions in China.In the way of introducing foreign capital,more and more multinational enterprises choose to enter the host country market through mergers and acquisitions,and bring advanced knowledge and technology,superior resources and management experience to the target enterprises through mergers and acquisitions.Foreign mergers and acquisitions in China not only have a direct substitution and creation effect on the employment of target enterprises,but also affect the employment of enterprises in the same industry and region through spillover effects.So how does foreign mergers and acquisitions affect the local employment level? What are the impact mechanisms? It is of great theoretical and practical value to solve the above problems and take effective employment guarantee measures and foreign capital utilization policies to promote the implementation of China’s "14th Five-Year" period of employment planning,implement employment priority policies,improve employment quality,alleviate structural employment contradictions,and make better use of foreign capital to jointly promote the formation of a benign employment cycle.First of all,this thesis combs the research of domestic and foreign scholars on this kind of problem from two aspects: the related theory of foreign capital M&A and employment and the empirical test of foreign capital M&A on employment.Secondly,this thesis combines the relevant theories of foreign capital M&A and employment,the heterogeneity effect of foreign capital M&A on employment and the influence mechanism.Thirdly,based on the data of China’s urban statistical yearbook from 2000 to 2019 and the M&A data of listed companies in the global M&A transaction analysis database,this thesis matches the M&A data to the urban level through the registration of M&A enterprises,and uses the PSM-DID method to conduct empirical analysis and robustness test on the impact of foreign M&A on local employment.According to the different industries and urban levels of employees,the heterogeneity analysis of sub-samples is carried out.Finally,on the basis of studying the impact of foreign mergers and acquisitions on local employment,this thesis studies the impact mechanism of foreign mergers and acquisitions on local employment from the channels of wages and labor productivity.Based on the theoretical analysis and empirical test results of this thesis,this thesis puts forward policy suggestions on employment,and provides reference for China to make more rational use of foreign capital,implement employment priority policies and promote a virtuous circle of employment.Through theoretical and empirical research,this thesis draws the following conclusions :First,foreign mergers and acquisitions significantly promote the employment level of Chinese cities;second,foreign mergers and acquisitions significantly increase the employment level of the local secondary industry and tertiary industry,and the impact of foreign mergers and acquisitions on the employment of the local secondary industry is greater than that of the tertiary industry.The reason may be that foreign mergers and acquisitions tilt the manufacturing industry more than the service industry.Secondly,the impact of foreign M&A on the employment of local primary industry is negative,but the result is not significant;thirdly,foreign mergers and acquisitions can significantly improve the employment level of third-tier and below cities,and the impact on employment in first-tier and second-tier cities is positive,but the estimated results are not significant,so the impact is not significant.Fourth,foreign mergers and acquisitions can improve local employment levels by raising wages.Foreign mergers and acquisitions increase local labor productivity through positive technology spillover effects,thereby increasing local employment levels.This thesis argues that the government should implement the employment priority policy,promote the quality of employment to high-quality development,and alleviate the increasingly serious structural employment contradiction caused by technological progress and industrial structure upgrading.Cities should conform to the development trend,constantly expand the use of foreign capital,provide a good business environment for foreign capital,and attach importance to talent introduction policies.Workers themselves should strive to improve their skills and find jobs that match them.