Abstract
To maintain sustainable development, the government’s macro control is very important, but the system construction of the market itself can’t be ignored. From the perspective of aggregate supply, OFDI (outward foreign direct investment) in developing countries can sustainably promote domestic employment through different kind of channels such as human capital, a reverse spillover of the international technology, and marketization processes. Based on 30 provincial panel data from 2005 to 2017, stating from the C–D production function, this article empirically estimates the total effect and regional differences in the effect of OFDI on domestic employment in China by using the main approach of Sys-GMM. The results show that the promotion effect of OFDI on domestic employment has an obvious lag; the faster the marketization process, the more significant the current period’s substitution effect and the lagged period’s promotion effect of OFDI on domestic employment. This means that it is a lagged-period process for OFDI to enhance total factor productivity and realize the effective allocation of labor resources through various channels. Furthermore, whether the domestic promotion effect of OFDI can be effectively exerted is closely related to the process of domestic marketization. A good market system environment can effectively improve the efficiency of labor resources allocation, thus promoting the sustainable development of domestic employment. China’s market-oriented transformation has not yet been completed. The sustainable growth of China’s employment depends on further promoting a market-oriented economy. Therefore, it is suggested to accelerate the improvement of market mechanisms and related system construction, strengthen the role of the government in public service, and promote the coordinated development of OFDI and IFDI (inward foreign direct investment) in various regions to promote the sustainable development of employment.
Highlights
The basic premise of sustainable employment is to pursue the sustainability of human survival and development ability, which aims at promoting sustainable and effective employment creation of the whole society, continuously improving the quality of labor force and employment, and fully satisfying the employment development of workers
The results show that in general, outward foreign direct investment (OFDI) has an alternative effect on domestic employment, while in high-income areas, OFDI has an alternative effect on domestic employment
Large-scale OFDI in developing countries will have an important impact on their employment
Summary
The basic premise of sustainable employment is to pursue the sustainability of human survival and development ability, which aims at promoting sustainable and effective employment creation of the whole society, continuously improving the quality of labor force and employment, and fully satisfying the employment development of workers. The fundamental goal is to achieve the effective allocation of labor elements in the sustainable development system. With the development of international trade and investment, the allocation of production factors on a global scale will inevitably have an important impact on employment in various countries. China is a country with a large population, and employment has always been an important issue in Chinese social and economic development. From the perspective of the development process of international investment, a big foreign direct investment (FDI) absorber will gradually become a big source of foreign investment. China is a big country that has absorbed FDI for a long time. With the acceleration of China’s opening up process, more and more
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