{"title":"Impact of outward foreign direct investment on employment volatility: Evidence from China","authors":"Yuting Cen, Nannan Dong","doi":"10.1111/asej.12283","DOIUrl":null,"url":null,"abstract":"<p>Does outward foreign direct investment (OFDI) help stabilize employment in the home country? This paper studies the relationship between the volatility of employment growth and the OFDI of a firm using matched data of Chinese firms from 2000 to 2019. The empirical analysis shows that employment in OFDI firms is less volatile than that in non-OFDI firms. For firms in the eastern coastal areas of China, OFDI has a more obvious effect in restraining employment volatility. OFDI is also conducive to reducing employment volatility for firms that conduct OFDI in Asian, European, and American countries. Firms in the service sector conducting OFDI see a greater reduction in employment volatility. In addition, OFDI affects employment volatility mainly through the channels of technological innovation and production transfers. This study recommends that the government enact reforms in the domestic market to encourage more firms in China to invest.</p>","PeriodicalId":45838,"journal":{"name":"Asian Economic Journal","volume":"36 4","pages":"385-410"},"PeriodicalIF":1.0000,"publicationDate":"2022-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Asian Economic Journal","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/asej.12283","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Does outward foreign direct investment (OFDI) help stabilize employment in the home country? This paper studies the relationship between the volatility of employment growth and the OFDI of a firm using matched data of Chinese firms from 2000 to 2019. The empirical analysis shows that employment in OFDI firms is less volatile than that in non-OFDI firms. For firms in the eastern coastal areas of China, OFDI has a more obvious effect in restraining employment volatility. OFDI is also conducive to reducing employment volatility for firms that conduct OFDI in Asian, European, and American countries. Firms in the service sector conducting OFDI see a greater reduction in employment volatility. In addition, OFDI affects employment volatility mainly through the channels of technological innovation and production transfers. This study recommends that the government enact reforms in the domestic market to encourage more firms in China to invest.
期刊介绍：
The Asian Economic Journal provides detailed coverage of a wide range of topics in economics relating to East Asia, including investigation of current research, international comparisons and country studies. It is a forum for debate amongst theorists, practitioners and researchers and publishes high-quality theoretical, empirical and policy orientated contributions. The Asian Economic Journal facilitates the exchange of information among researchers on a world-wide basis and offers a unique opportunity for economists to keep abreast of research on economics pertaining to East Asia.
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