Under the complex background that Chinese firms' going-out steps into the new normal and employment pressure enlarges increasingly, to explore the effect mechanism of OFDI (outward foreign direct investment) on employment polarization effect, is of great significance to the alleviation of employment contradiction at present. This paper uses the matched data of Chinese industrial firms, verifies the effect of OFDI on employment polarization based on PSM and DID method. It indicates that OFDI significantly increases the employment of its home country's labor market overall, however the impacts of OFDI differ widely:the impact of OFDI on the employment level of high-tech and low-tech firms is more obvious, and the promotion role of OFDI in medium-tech firms is relatively weak, namely the existence of "high ends, middle low" phenomenon of employment polarization.Further study finds that firms' foreign direct investment in the Belt and Road countries can alleviate the employment polarization of labor market in China. Compared with low-and-middle-income countries, to a certain extent the direct investment in high-income countries will intensify employment polarization trend of the host country's labor market. Compared with foreign firms, foreign investment of state-owned and private firms has intensified the trend of low-skill polarization of labor force. The research above provides a useful inspiration and reference for the sound interaction between better going-out of Chinese firms and employment priority strategy.
Does Outward Foreign Direct Investment Affect Job Polarization in the China's Labor Market?
Journal of Finance and Economics Vol. 43, Issue 06, pp. 28 - 39 (2017) DOI:10.16538/j.cnki.jfe.2017.06.003
Cite this article
Li Hongbing, Guo Jiexiu, Zhai Ruirui. Does Outward Foreign Direct Investment Affect Job Polarization in the China's Labor Market?[J]. Journal of Finance and Economics, 2017, 43(6): 28–39.