Empirical analysis on the effect of the China's foreign direct investment on the domestic employment

Based on the econometric model which was established with the data of 1985 ∼ 2006 in China and through the ADF test and inspection of granger, this paper employed OLS empirical method to analyze the total impact of the China's foreign direct investment on the domestic employment. Results show that the growth of foreign direct investment can promote the domestic employment growth. Analysis on the employment structure of three industry indicate that China's foreign direct investment is positively correlated with the employment changes in the second and the third industry, and negatively with the employment changes in the first industry. It optimizes the industrial structure in China.