The Home-Employment Effect of Transnational Corporations' FDI: the Case of China

摘要

The current extensive literature on the home-country employment effect of FDI focuses almost exclusively on the investments from developed countries. In this paper the authors analyze the home-country employment effect in China, a country that has emerged as an important emerging economy increasingly integrated into the global economy. This study investigates the long-run relationships between outward FDI and employment in China. Johansen's (1988) cointegration technique and Toda and Yamamoto's (1995) Granger causality tests are applied to data for the period from 1982 to 2007. The results indicate that outward FDI from China had a positive impact on 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 from highincome countries.