Foreign Direct Investment and Wage Inequality in host country
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| Title | Foreign Direct Investment and Wage Inequality in host country
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| Author | Zhou Yunbo, Chen Cen and Tian Liu |
| Organization | Nankai university |
| Email | zyunbonk@163.com；cecelia0667@163.com；349007372@qq.com |
| Key Words | FDI; wage inequality; Theil index; sharply value decomposition |
| Abstract | Based on the theoretical analysis of the effects of foreign direct investment (FDI) on wage inequality, the paper calculates contributions of relevant factors, particularly FDI, to wage inequality in enterprise-level by using the regression-based decomposition approach (Shapley value). Theoretical analysis shows that the wage gap between foreign and local firms which caused by FDI through labor transfer and technology spillover presents an inverted U-shaped feature. Empirical analysis shows FDI has great influence on China's wage inequality which contributed to over 10 percent. With regard to the general trend, the contribution rate of FDI showing an overall trend of declining. The reason is that the wage gap between foreign and local firms which caused by FDI through labor transfer and technology spillover has entered the downward phase. Thus in order to reduce the wage gap between enterprises, we shall take advantage of this trend to further expand the scope of opening up the field.． |
| Serial Number | WP936 |
| Time | 2015-10-23 |
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