ZHAO Dezhao:Is There Threshold Effect of FDI on Transference of Redundant Rural Labor Force?

Abstract：Theoretical analysis finds that, FDI has critical impact on the transference of redundant rural labor force via paying wage premium and providing more employment opportunity in China which owns characteristics of transition economy.Meanwhile, based on the nonlinear econometric theory represented by threshold regression, this paper conducts “threshold effect” panel model to analyze threshold effect of FDI on the transference of redundant rural labor force by using provincial panel data from 1998 to 2011.The results show that, the effect of FDI on the transference of redundant rural labor force lies in the “double threshold effect” of actual FDI stock and actual urban-rural income gap, and there is positive nonlinear relationship between FDI and the transference of redundant rural labor force.As the threshold value increases, the positive effect of FDI on the transference of redundant rural labor force gets weaker.

Key words： Foreign Direct Investment   Redundant Rural Labor Force   Threshold Effect

source:Finance & Trade Economics ,No.11,2014