Growing Against the Background of Colonization? Chinese Labor Market and FDI in a Historical Perspective
33 Pages Posted: 24 Jul 2018
Date Written: June 11, 2018
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
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