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

The home‐employment effect of FDI from developing countries: in the case of China 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Chinese Economic and Foreign Trade Studies Emerald Publishing

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

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References (36)

Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1754-4408
DOI
10.1108/17544401111178212
Publisher site
See Article on Publisher Site

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.

Journal

Journal of Chinese Economic and Foreign Trade Studies – Emerald Publishing

Published: Oct 4, 2011

Keywords: China; International investments; Employment; Developing countries; Emerging economy; Outward foreign direct investment; Employment effect

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