Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/223464 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8392
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
This study investigates the long-term influence of colonial legacy on the nexus between inward foreign direct investment (FDI) and labor market. We construct a panel dataset containing 285 Chinese cities 2011 to 2017 along with detailed information about Chinese modern history during 1842-1955). Our results show that the inward FDI has a positive effect on employment and such an effect is more pronounced in the regions with colonial influence than their counterparts. Further, we find that the experience of Western colonization strengthens the positive effect of inward FDI on employment whereas the experience of Japanese colonization weakens or even overturns this positive effect. These findings are robust to controlling for the endogeneity between inward FDI and employment as well as employing alternative measures for the colonization.
Subjects: 
colonial legacy
foreign direct investment
employment
Chinese modern history
JEL: 
N01
F21
J23
Document Type: 
Working Paper
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