Application of Causal Inference Analysis Economic Growth on Labor Production from Foreign Direct Investment

Abstract

In recent four decades, policy reform has integrated China’s economy into global. Since 1981, foreign direct investment (FDI) has been gradually flowing into the Yangtze River Delta region. As a result, this region has enjoyed strong economic strength based on abundant human resources and convenient transportation network. Shanghai, the key city, has become one of the major cites attracting FDI; meanwhile, FDI also has had a tremendous impact on Shanghai’s economic development, including employment. To sum up, Shanghai has been chosen as the research object in this paper. This research is organized by four parts: firstly, a theoretical analysis of employment effects of FDI is presented; secondly, after combining the actual utilization of FDI and employment in Shanghai, an empirical analysis of the effects of FDI on employment quantity and employment quality is carried out by data and regression models; thirdly, this research found FDI has exerted a negative influence on employment quantity in Shanghai; moreover, FDI also has shown a positive impact on the employment quality; and finally, the paper has proposed some suggestions to FDI’s utility in the future.