Analysis On The Difference Upon Employment Effect Of Foreign Direct Investment

In recent years,the scale of foreign direct investment in China showed an overall growth trend,and exceeded the United States for the first time in 2014,becoming the world's largest FDI inflow country.But FDI invest in manufacturing industry presents a certain degree of low-end lock,which is not conducive to the change of foreign investment from "quantity" to "quality".The inflow of FDI has had a profound impact on employment,and many scholars have studied the employment effect of foreign direct investment.The impact of manufacturing FDI on employment is also of concern.At present,the sustainable development of China's manufacturing industry is facing many issues,including the constraints of resources and environment,weak industrial development,lack of industrial technology innovation capacity and so on,thus accelerating the development of advanced manufacturing industry is without delay.This paper chooses different types of manufacturing industry as the angle of view,deeply explores the differences in the employment effect of traditional and advanced manufacturing FDI and the reasons.This is of great theoretical and practical significance for the improvement of industrial structure and employment in manufacturing industry.This paper first carries on the general theoretical analysis to the transmission mechanism of manufacturing foreign direct investment affecting employment,and then constructs the VAR model to study the impact of the overall foreign direct investment on employment.It is found that the change of FDI,domestic capital formation and export growth rate has a positive effect on the change of employment growth rate,and the change of R&D investment rate has a negative impact on the change of employment growth rate.Then,using the panel data of the subdivided manufacturing industry,analyze the differences in the employment effect of traditional and advanced manufacturing foreign direct investment comparatively,in the framework of foreign direct investment,domestic capital formation,export trade,R&D investment,average wage and other factors.The results show that the impact of advanced manufacturing FDI and domestic capital formation on employment is greater than that of traditional manufacturing industry.However,the influence of advanced manufacturing export trade on employment is less than that of traditional manufacturing industry.The influence of advanced manufacturing R&D investment has a significant negative impact on employment.But the impact of traditional manufacturing R&D investment on employment is not significant.Finally,this paper puts forward some useful suggestions on how to adjust the strategy of foreign investment introduction in order to realize the upgrading of the industrial structure and the improvement of the employment situation as soon as possible.