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

  • Huiqun Liu
  • Jinyong Lu
Registered author(s):

    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.

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    Article provided by Emerald Group Publishing in its journal Journal of Chinese Economic and Foreign Trade Studies.

    Volume (Year): 4 (2011)
    Issue (Month): 3 (October)
    Pages: 173-182

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    Handle: RePEc:eme:ceftpp:v:4:y:2011:i:3:p:173-182
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