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The home-employment effect of FDI from developing countries: in the case of China

Author

Listed:
  • Huiqun Liu
  • Jinyong Lu

Abstract

Purpose - The current extensive literature on the home-country employment effect of foreign direct investment (FDI) focuses almost exclusively on the investments from developed countries. The purpose of this paper is to analyze the home-country employment effect in China, a country that has emerged as an important emerging economy increasingly integrated into the global economy. Design/methodology/approach - This study investigates the long-run relationships between outward FDI and employment in China. Johansen's cointegration technique and Toda and Yamamoto's Granger causality tests are applied to data for the period 1982-2007. Findings - The results indicate that outward FDI from China had a positive impact on the home-country employment growth, especially in tertiary industry. These results also imply that the logic of the outward investments from low-cost transitional and developing economies differs from that of high-income countries. Originality/value - In this paper, the authors analyze the home-country employment effect of FDI in China.

Suggested Citation

  • Huiqun Liu & Jinyong Lu, 2011. "The home-employment effect of FDI from developing countries: in the case of China," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 4(3), pages 173-182, October.
  • Handle: RePEc:eme:ceftpp:v:4:y:2011:i:3:p:173-182
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    References listed on IDEAS

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