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Labour Quality and Inward FDI: A Firm-level Empirical Study in China

Author

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  • Faqin Lin

    (School of Economics, University of Adelaide)

Abstract

This paper uses a large sample of Chinese cross-section firm-level data with comprehensive information about labour quality to investigate the relationship between labour quality and FDI distribution in China. Using parametric, IV-GMM and non-parametric techniques, the author finds that labour quality measured by education level plays an important role on deciding the distribution of FDI but labour quality measured by working certificates lose their significance. The author also finds that labour quality has a more significant impact on other foreign investments than HMT invested firms and the impacts of labour quality on FDI is strongly uneven across industries and provinces.

Suggested Citation

  • Faqin Lin, 2011. "Labour Quality and Inward FDI: A Firm-level Empirical Study in China," School of Economics and Public Policy Working Papers 2011-12, University of Adelaide, School of Economics and Public Policy.
    • Handle: RePEc:adl:wpaper:2011-12
    as

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    File URL: https://media.adelaide.edu.au/economics/papers/doc/wp2011-12.pdf
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    References listed on IDEAS

    as
    1. Gao, Ting, 2005. "Labor quality and the location of foreign direct investment: Evidence from China," China Economic Review, Elsevier, vol. 16(3), pages 274-292.
    2. Jr‐Tsung Huang, 2004. "Spillovers from Taiwan, Hong Kong, and Macau Investment and from Other Foreign Investment in Chinese Industries," Contemporary Economic Policy, Western Economic Association International, vol. 22(1), pages 13-25, January.
    3. Carsten A. Holz, 2004. "China's Statistical System in Transition: Challenges, Data Problems, and Institutional Innovations," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 381-409, September.
    4. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Estimating the effects of free trade agreements on international trade flows using matching econometrics," Journal of International Economics, Elsevier, vol. 77(1), pages 63-76, February.
    5. Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Keshab Bhattarai & Vipin Negi, 2020. "FDI and Economic Performance of Firms in India," Studies in Microeconomics, , vol. 8(1), pages 44-74, June.
    2. Mihaela SIMIONESCU & Maria-Simona NARO?, 2019. "The Role Of Foreign Direct Investment In Human Capital Formation For A Competitive Labour Market," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 11(1), pages 5-14, March.
    3. Faqin Lin & Chao Zhang & Lin Wang, 2013. "Vertical Spillover Effects of Multinationals on Chinese Domestic Firms via Supplier–Customer Relationships," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(6), pages 37-57, November.
    4. Faqin Lin, 2018. "Cross†country diffusion of ideology via FDI : Micro†evidence from China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(1), pages 3-34, January.
    5. Lin, Faqin & Long, Cheryl X., 2020. "The impact of globalization on youth education: Empirical evidence from China's WTO accession," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 820-839.
    6. Chunlai Chen & Yan Wu, 2019. "Interregional Impact Of Foreign Direct Investment On China’S Inland Urbanization," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(04), pages 997-1017, September.
    7. Xinyuan Wang & Daisheng Tang & Yahong Liu & Tao Bu, 2023. "The impact of high-speed railway on labor market between the North and South: evidence from China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 71(2), pages 487-515, October.
    8. Sahiti Arben & Ahmeti Skender & Ismajli Hysen, 2018. "A Review of Empirical Studies on FDI Determinants," Baltic Journal of Real Estate Economics and Construction Management, Sciendo, vol. 6(1), pages 1-11, March.

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    More about this item

    Keywords

    education; foreign direct investment; labour quality;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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