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Growing Against the Background of Colonization? Chinese Labor Market and FDI in a Historical Perspective

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Listed:
  • Hao Wang
  • Jan Fidrmuc
  • Yunhua Tian

Abstract

This article investigates how the legacy of colonization shapes the impact of inward FDI on employment in the Chinese labor market. The analysis utilizes provincial panel on overall employment and employment in the service sector during 2006-15. We find that inward FDI significantly promotes employment and that this relationship is stronger in regions once colonized by Western countries. Conversely, regions with a legacy of Japanese colonization display a weaker, and even negative, relationship between FDI and employment. These findings are robust to controlling for the length and intensity of colonization, as well as for endogeneity of FDI.

Suggested Citation

  • Hao Wang & Jan Fidrmuc & Yunhua Tian, 2018. "Growing Against the Background of Colonization? Chinese Labor Market and FDI in a Historical Perspective," CESifo Working Paper Series 7093, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_7093
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    References listed on IDEAS

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    1. repec:sae:niesru:v:160:y::i:1:p:63-75 is not listed on IDEAS
    2. Auer, Raphael A., 2015. "Human capital and the dynamic effects of trade," Journal of Development Economics, Elsevier, vol. 117(C), pages 107-118.
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    7. Driffield, Nigel & Taylor, Karl, 2000. "FDI and the Labour Market: A Review of the Evidence and Policy Implications," Oxford Review of Economic Policy, Oxford University Press, vol. 16(3), pages 90-103, Autumn.
    8. Che, Yi & Du, Julan & Lu, Yi & Tao, Zhigang, 2015. "Once an enemy, forever an enemy? The long-run impact of the Japanese invasion of China from 1937 to 1945 on trade and investment," Journal of International Economics, Elsevier, vol. 96(1), pages 182-198.
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    10. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472 Elsevier.
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    More about this item

    Keywords

    foreign direct investment; colonization; human capital; China;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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