Empirical investigation of FDI impact on China's employment

At present, inward FDI plays an important role in China's economic development, and also has exerted powerful influence on employment. An empirical analysis of Inward FDI's effect on China's employment in the time period of 1984 to 2004 is reported in this paper, utilizing co-integration, error correct model (ECM) and Granger causality tests. The result shows that inward FDI has a positive and statistically significant effect on China's employment in the long and short run. It also indicates that the stimulation of FDI to economic growth, trade performance and employment of interrelated industry has become major factors affecting China's employment. The Granger causality test reveals that causality between inward FDI Granger and China's employment. Finally, some recommendations on future government policy are given in this Work as well.