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

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  • 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.
  • Handle: RePEc:ces:ceswps:_7093
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    Cited by:

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    2. Jim Huangnan Shen & Hao Wang & Steve Chu‐Chia Lin, 2021. "Productivity Gap and Inward FDI Spillovers: Theory and Evidence from China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(2), pages 24-48, March.

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    More about this item

    Keywords

    foreign direct investment; colonization; human capital; China;
    All these keywords.

    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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