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

Huiqun Liu (School of Economics, Tianjin University of Commerce, Tianjin, China)
Jinyong Lu (China Research Center for FDI, School of International Trade and Economics, University of International Business and Economics, Beijing, China)

Journal of Chinese Economic and Foreign Trade Studies

ISSN: 1754-4408

Publication date: 4 October 2011

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.

Keywords

Citation

Liu, H. and Lu, J. (2011), "The home‐employment effect of FDI from developing countries: in the case of China", Journal of Chinese Economic and Foreign Trade Studies, Vol. 4 No. 3, pp. 173-182. https://doi.org/10.1108/17544401111178212

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited