Does foreign direct investment affect wage inequality in Chinese manufacturing sector?

Jifeng Zhang, Guanru Wang and Bing He

Applied Economics Letters, 2023, vol. 30, issue 1, 80-83

Abstract: Using panel data from 26 industries in the Chinese manufacturing sector from 2002 to 2016, this study examines the impact of foreign direct investment (FDI) on wage inequality. We find that on average, 1% increment in FDI significantly increased wage inequality by 0.112%. Moreover, the study concludes that the relationship between FDI and wage inequality is nonlinear. Furthermore, in the subsample analysis, scale and R&D investment of the industries is strongly related to wage inequality.

Date: 2023
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DOI: 10.1080/13504851.2021.1976378

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