Abstract This paper uses the Geweke decomposition test and cointegration theory to empirically study the long-run and instantaneous causal relation between employment structure and foreign investment, and to investigate the effect of foreign investment on the employment structure within each industry. The results are as following: There is a unidirectional causality running from foreign investment to the adjustment of employment structure; foreign investment has a positive impact on the employment proportion of the secondary industry and the tertiary industry while it has a negative impact on the employment proportion of the primary industry. Moreover, there is an instantaneous causality between foreign investment and the employment proportion of the tertiary industry.
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Received: 19 October 2009
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Corresponding Authors:
Yuandong Gao
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