Effects of China´s Outward FDI on Domestic Employment

With the improvement of international competitiveness of Chinese economy and the implementation of going global strategy, China´s outward FDI has developed quickly. This paper explores the effects of China´s outward FDI on domestic employment by examining the data of 25 provinces from 2003 to 2009, and combines the Cobb-Douglas production function and system GMM estimation. The result shows that preliminary labor demand and current wage income have substitution effect on domestic employment, GDP and preliminary wage income have significantly positive effect on domestic employment, China´s outward FDI can promote domestic employment, but the effect is not significant.