Study On The Impact Of Foreign Direct Investment On Manufacturing Employment

With the introduction of foreign direct investment and employment pressureincreasing, the impact of foreign direct investment on Employment in China attracts moreand more attention. Manufacturing is not only the industry which absorbed the mostforeign direct investment, but also the industry which absorbed the largest sector ofemployment. Therefore, taking the manufacturing sector as a starting point,there is apratical point in exploring whether the foreign direct investment has an effect on China’smanufacturing employment and what kind of impact it is.In this paper the combination of qualitative analysis and quantitative analysis,as well asthe combination of normative analysis and empirical analysis are used.Also from twoaspects of employment number and employment quality,this article respectively studies theinfluence of foreign direct investment on employment in China.Main contents are asfollows: first of all it simply introduces the theory about the relation of foreign directinvestment and employment; Secondly it introduces the foreign direct investment inmanufacturing employment impact in our country; Then it carries on the analysis aboutFDI’s influence on the number of manufacturing employment in China, through a unit roottest,cointegration test and granger causality test.It is concluded that there exists a long-termstable relationship between the number of manufacturing employment and foreign directinvestment in China, and the increase of foreign direct investment can promote the increaseof manufacturing employment in our country.Then it analyzes foreign direct investment’simpact on the number of manufacturing employment, and simply introduces themechanism of the effect of foreign direct investment on employment quality.UsingDouglas production function model building, it is conclued that foreign direct investmentplays a facilitating role in raising wages in China’s manufacturing industry. Finally,according to the above analysis,it is concluded that the foreign direct investment has along-term impact on the number of manufacturing employment in our country, the increaseof foreign direct investment can promote the increase of manufacturing employment in ourcountry and foreign direct investment was beneficial to the improvement of the quality ofmanufacturing employment in our country. Then I put forward some policy suggestions.