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Foreign Direct Investment and Wage Inequality: Evidence from the People’s Republic of China

dc.contributor.authorCen Chen
dc.contributor.authorHongmei Zhao
dc.contributor.authorYunbo Zhou
dc.date.accessioned2017-07-10T18:37:57Z
dc.date.available2017-07-10T18:37:57Z
dc.date.issued2017-05-30
dc.identifier.urihttp://hdl.handle.net/11540/7170
dc.description.abstractBased on theoretical analysis of effects of foreign direct investment (FDI) on the wage gap between foreign firms and domestic firms in the host country, we use data from Chinese Industrial Enterprises Database to measure these effects. Theoretical results show that the wage gap between foreign firms and domestic firms in the host country caused by the FDI labor transfer effect and technology spillover effect tends to increase then decrease, which implies an inverted U curve track. The empirical results show that the FDI has significant effects on the wage gap in the People’s Republic of China (PRC) during the observed time period. The contribution of the FDI to change of the wage gap is above 10%, which is in the second position among all observed factors. From the overall point of view, the contribution of the FDI tends to decrease. The reason is that the wage gap caused by the FDI has stepped into the decreasing stage. This means the wage gap between foreign firms and domestic firms currently has been on the latter part of the inverted U curve. The Chinese government should expand fields for FDI so as to decrease the wage gap between foreign firms and domestic firms. This policy implication should be helpful for the PRC to step over the “middle-income trap”.
dc.languageEnglish
dc.publisherAsian Development Bank Institute
dc.titleForeign Direct Investment and Wage Inequality: Evidence from the People’s Republic of China
dc.typeWorking Papers
dc.subject.expertDevelopment Indicators
dc.subject.expertEnvironmental Indicators
dc.subject.expertEconomic Indicators
dc.subject.expertEducational Indicators
dc.subject.expertDemographic Indicators
dc.subject.expertHealth Indicators
dc.subject.expertDisadvantaged Groups
dc.subject.expertLow Income Groups
dc.subject.expertSocially Disadvantaged Children
dc.subject.expertRural Conditions
dc.subject.expertRural Development
dc.subject.expertSocial Conditions
dc.subject.expertUrban Development
dc.subject.expertUrban Sociology
dc.subject.expertPension Funds
dc.subject.expertMutual Funds
dc.subject.expertSocial Equity
dc.subject.expertFinancial Aspects
dc.subject.expertFiscal Policy
dc.subject.adbAlleviating Poverty
dc.subject.adbAnti-Poverty
dc.subject.adbExtreme Poverty
dc.subject.adbFight Against Poverty
dc.subject.adbGlobal Poverty
dc.subject.adbHealth Aspects Of Poverty
dc.subject.adbIndicators Of Poverty
dc.subject.adbParticipatory Poverty Assessment
dc.subject.adbPoverty Eradication
dc.subject.adbPoverty Analysis
dc.subject.adbPoverty In Developing Countries
dc.subject.adbPoverty Reduction Efforts
dc.subject.adbUrban Poverty
dc.subject.adbPublic Financial Management
dc.subject.adbFinancial System
dc.subject.adbFinancial Statistics
dc.subject.adbForeign Direct Investment
dc.subject.adbForeign and Domestic Financing
dc.subject.naturalPoor
dc.subject.naturalEconomic forecasting
dc.subject.naturalHealth expectancy
dc.subject.naturalSocial groups
dc.subject.naturalPolitical participation
dc.subject.naturalDistribution of income
dc.subject.naturalInequality of income
dc.subject.naturalDeveloping countries
dc.subject.naturalRural community development
dc.subject.naturalMass society
dc.subject.naturalSocial change
dc.subject.naturalSocial policy
dc.subject.naturalSocial stability
dc.subject.naturalPopulation
dc.subject.naturalSustainable development
dc.subject.naturalPeasantry
dc.subject.naturalUrban policy
dc.subject.naturalUrban renewal
dc.subject.naturalPension plans
dc.subject.naturalIndividual retirement accounts
dc.subject.naturalEmployee pension trusts
dc.subject.naturalInvestment management
dc.subject.naturalInvestments
dc.title.seriesADBI Working Paper Series
dc.title.volumeNO. 734
dc.contributor.imprintAsian Development Bank Institute
oar.themePoverty
oar.themeFinance
oar.adminregionAsia and the Pacific Region
oar.countryBangladesh
oar.countryBhutan
oar.countryIndia
oar.countryMaldives
oar.countryNepal
oar.countrySri Lanka
oar.countryBrunei Darussalam
oar.countryCambodia
oar.countryIndonesia
oar.countryLao People's Democratic
oar.countryMalaysia
oar.countryMyanmar
oar.countryPhilippines
oar.countrySingapore
oar.countryThailand
oar.countryViet Nam
oar.countryCook Islands
oar.countryFiji Islands
oar.countryKiribati
oar.countryMarshall Islands
oar.countryFederated States of Micronesia
oar.countryNauru
oar.countryPalau
oar.countryPapua New Guinea
oar.countrySamoa
oar.countrySolomon Islands
oar.countryTimor-Leste
oar.countryTonga
oar.countryTuvalu
oar.countryVanuatu
oar.countryAfghanistan
oar.countryArmenia
oar.countryAzerbaijan
oar.countryGeorgia
oar.countryKazakhstan
oar.countryKyrgyz Republic
oar.countryPakistan
oar.countryTajikistan
oar.countryTurkmenistan
oar.countryUzbekistan
oar.countryPeople's Republic of China
oar.countryHong Kong
oar.countryChina
oar.countryRepublic of Korea
oar.countryMongolia
oar.countryTaipei,China
oar.identifierOAR-006791
oar.authorChen, Cen
oar.authorZhao, Hongmei
oar.authorZhou, Yunbo
oar.importTRUE
oar.googlescholar.linkpresenttrue


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    The Asian Development Bank Institute (ADBI) Working Paper series is a continuation of the formerly named Discussion Paper series which began in January 2003. The numbering of the papers continued without interruption or change. ADBI was established in 1997 in Tokyo, Japan, to help build capacity, skills, and knowledge related to poverty reduction and other areas that support long-term growth and competitiveness in developing economies in Asia and the Pacific.

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