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Foreign Firms and Chinese Employment

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Author Info

  • Sune Karlsson
  • Nannan Lundin
  • Fredrik Sjöholm
  • Ping He

Abstract

This paper examines the effect of foreign direct investment (FDI) on employment in the Chinese manufacturing sector. As one of the world's largest recipients of FDI, China has arguably benefited from foreign multinational enterprises in various respects. However, one of the main challenges for China, and other developing countries, is job creation, and the effect of FDI on employment is uncertain. The effect depends on the amount of jobs created within foreign firms as well as the effect of FDI on employment in domestic firms. We analyse FDI and employment in China using a large sample of manufacturing firms for the period 1998-2004. Our results show that FDI has positive effects on employment growth. The relatively high employment growth in foreign firms is associated with their firm characteristics and their high survival rate. Employment growth is also relatively high in private domestic Chinese firms. There also seems to be a positive indirect effect of FDI on employment in private domestically-owned firms, presumably caused by spillovers. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal World Economy.

Volume (Year): 32 (2009)
Issue (Month): 1 (01)
Pages: 178-201

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Handle: RePEc:bla:worlde:v:32:y:2009:i:1:p:178-201

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Cited by:
  1. Chun, Sun Eae & Nagano, Mamoru & Lee, Min Hwan, 2010. "Ownership Structure and Risk-taking Behavior: Evidence from Banks in Korea and Japan," MPRA Paper 25334, University Library of Munich, Germany.
  2. Fabienne Fortanier & Selwyn Moons, 2011. "Foreign Investors in The Netherlands: Heterogeneous Employment and Productivity Effects," De Economist, Springer, vol. 159(4), pages 511-531, December.

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