Under the background of constant expansion of gender employment gap in China, this paper uses the China Industrial Statistics Database from 2004 to 2007 to examine the influence of foreign capital entry on gender employment gap at the enterprise level through competition effect. It shows that the regions and industries with higher degree of foreign capital entry experience lower-degree gender employment gap and the increase in foreign capital entry by 1% results in the increase in female employment share in enterprises with domestic funding by 0.0457%. The result is still robust after considering the sampling bias, the different definitions of foreign entry scope, different measures of foreign capital entry degree and the control of endogeneity. Further study indicates that foreign capital entry advances enterprises aiming at profit maximization to employ more female labor forces with lower costs by improving the completion degree that enterprises encounter, thereby leading to the reduction in gender employment gap. More important, the effect of competition resulting from foreign capital entry on gender gap varies with groups with different education background, and it has the greatest effect on groups with higher education, especially graduate education or above. It concludes that under the background of economic globalization, the perfection of market competition mechanism and the improvement of female education are beneficial to the reduction in gender employment gap. In addition, it also offers a different clue for the research of social and economic effects of foreign capital entry.
Foreign Capital Entry, Competition and Gender Employment Gap
Journal of Finance and Economics Vol. 42, Issue 11, pp. 73 - 85 (2016) DOI:10.16538/j.cnki.jfe.2016.11.006
Cite this article
Li Lei, Wang Xiaojie, Sun Puyang. Foreign Capital Entry, Competition and Gender Employment Gap[J]. Journal of Finance and Economics, 2016, 42(11): 73–85.