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FDI and Job Creation in China

Author

Listed:
  • Karlsson, Sune

    (Örebro University)

  • Lundin, Nannan

    () (Research Institute of Industrial Economics (IFN))

  • Sjöholm, Fredrik

    () (Research Institute of Industrial Economics (IFN))

  • He, Ping

    (National Bureau of Statistics of China)

Abstract

This paper examines the effect of FDI on job creation in the Chinese manufacturing sector. As one of the world’s largest recipients of FDI, China has arguably benefited from foreign multinational enterprises in various respects. However, one of the main challenges for China, and other developing countries, is job-creation, and the effect of FDI on job creation is uncertain. The effect depends on the amount of jobs created within foreign firms as well as the effect of FDI on job creation in domestic firms. We analyze FDI and job creation in China using a large sample of manufacturing firms for the period 1998-2004. Our results show that FDI has positive effects on employment growth. The positive effect of job creation in foreign firms is associated with their firm characteristics and, in particular, their access to export markets. There also seems to be a positive indirect effect on job creation in domestically owned firms, presumably caused by spillovers.

Suggested Citation

  • Karlsson, Sune & Lundin, Nannan & Sjöholm, Fredrik & He, Ping, 2007. "FDI and Job Creation in China," Working Paper Series 723, Research Institute of Industrial Economics.
  • Handle: RePEc:hhs:iuiwop:0723
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    Cited by:

    1. repec:eee:touman:v:32:y:2011:i:3:p:616-628 is not listed on IDEAS
    2. Tsai Chang-hsien, 2011. "International Jurisdictional Competition under Globalization: From the U.S. Regulation of Foreign Private Issuers to Taiwan's Restrictions on Outward Investment in Mainland China," Asian Journal of Law and Economics, De Gruyter, vol. 2(1), pages 1-102, April.

    More about this item

    Keywords

    China; Employment; Foreign Direct Investment; Job Creation;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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