Foreign Direct Investment,Private Shares and Quality of Labors:Empirical Evidence from China's Firm-level Data
With the rapid growth of scale of foreign direct investment flows into China,how to utilize and absorb FDI more effectively is a hot topic in the current academic circles. Using firm-level data conducted by the World Bank in 2001,this paper explores the relevance of private shares and the spillovers of FDI on Chinese enterprises. The empirical results show that with the more flexible salary system,enterprises which have higher private shares can provide higher wages of skilled labors with the presence of FDI,thereby improving the quality of the skilled labor,especially that of the managers that tend to be more scarce. Meanwhile,along with the improvement of the quality of labor,the enterprise can benefit from the spillovers of FDI through the effect of backward linkage.