Growing Against the Background of Colonization? Chinese Labor Market and FDI in a Historical Perspective

33 Pages Posted: 24 Jul 2018

See all articles by Hao Wang

Hao Wang

Brunel University London - Department of Economics and Finance

Jan Fidrmuc

Brunel University - Department of Economics and Finance; L.E.M., Université de Lille; CESifo (Center for Economic Studies and Ifo Institute); Global Labor Organization (GLO); Institute for Strategy and Analysis, Government Office of the Slovak Republic

Yunhua Tian

Guangdong University of Foreign Studies

Multiple version iconThere are 2 versions of this paper

Date Written: June 11, 2018

Abstract

This article investigates how the legacy of colonization shapes the impact of inward FDI on employment in the Chinese labor market. The analysis utilizes provincial panel on overall employment and employment in the service sector during 2006-15. We find that inward FDI significantly promotes employment and that this relationship is stronger in regions once colonized by Western countries. Conversely, regions with a legacy of Japanese colonization display a weaker, and even negative, relationship between FDI and employment. These findings are robust to controlling for the length and intensity of colonization, as well as for endogeneity of FDI.

Keywords: foreign direct investment, colonization, human capital, China

JEL Classification: F210, F540, O150

Suggested Citation

Wang, Hao and Fidrmuc, Jan and Fidrmuc, Jan and Tian, Yunhua, Growing Against the Background of Colonization? Chinese Labor Market and FDI in a Historical Perspective (June 11, 2018). CESifo Working Paper Series No. 7093, Available at SSRN: https://ssrn.com/abstract=3215102 or http://dx.doi.org/10.2139/ssrn.3215102

Hao Wang

Brunel University London - Department of Economics and Finance ( email )

Kingston Lane
Uxbridge, Middlesex UB8 3PH
United Kingdom

Jan Fidrmuc (Contact Author)

Brunel University - Department of Economics and Finance ( email )

Uxbridge UB8 3PH
United Kingdom
+44 1895 266 528 (Phone)
+44 1895 269 770 (Fax)

L.E.M., Université de Lille ( email )

France

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Global Labor Organization (GLO) ( email )

Collogne
Germany

Institute for Strategy and Analysis, Government Office of the Slovak Republic ( email )

Bratislava
Slovakia

Yunhua Tian

Guangdong University of Foreign Studies

Collaborative Innovation Center for Silk Road
Guangzhou
China

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