BNU
FDI、Cluster and Labor Allocation
Zheng Feihu, Beijing Normal University
BNU
一、Background: Location of FDI
１
OLI Paradigm
The location decision is a complex one
２
By the 1980s,external demand and
supply forces change the MNC
management practices
３
The particular choice of location
within a country or free-trade area is
now the central problem
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一、Background: Industry Cluster
Good infrastructure
Mutual Learning
Self- reinforcing mechanism
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Our question is
1
2
3
Marshall’s (1920)
tripartite
explanation——
Inform. spillovers,
Skilled Labor pool,
Local inputs
Porter’s(1990)
industry cluster
with the emphasis
on the role played
by local
information
We want to
know—— What’s
the effects on the
skilled labor pool?
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二、Analytical framework:

labor movement: personal revenue Vs cost

firm cluster: organization revenue Vs cost

Industry cluster: market structure
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(一)labor movement
Why the
problem of
“Rural-Urban
Migration
shortage” in
south-china?
Blue-collar’s
decision:
Urban
Wage>Rural wage
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personal
revenue Vs cost
Why the
problem of
“human
capital
depreciation”
?
White-collar’s
decision:
Revenue>cost
(Sunk cost and
Living cost)
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(二) firm cluster
Labor
character.—
Unstable
Nonidentifiable
entrepreneur’s
decision based on
Labor intensive
competition
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organization
revenue Vs cost
entrepreneur’s
decision based on
capital intensive
competition
Labor
character.—
Stable
relation
identifiable
entrepreneur’s
decision based on
knowledge
intensive
competition
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(三)industry cluster
“Rural-Urban
Migration
fluctuation?
Professional
workers
allocation?
Zhu River
triangle
region of
south china
Chang river
triangle
region of
china
Pure
agglomeration
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market structure
Industry
complex
Strategic
innovation
complex
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Inter-relations
1
General labor :
Atomistic
allocated(1)
Specific labor :
Bounded
allocated(2)
Specific labor:
Networked
allocated(3)
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2
3
Labor-intensive
firm clusters(1)
Pure
agglomeration(1)
Capital-intensive
Firm clusters(2)
Industry complex(2)
Knowledgeintensive firm
clusters(3)
Strategic Innovation
complex(3)
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三、future research:
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1
Data intensive analysis of labor
movement’s decision and
information.
2
More indices of the nature and scope
of the linkages between worker and
entrepreneur’s game
3
Deepening understanding of the
linkages between the firm cluster and
industry cluster, esp.based on the
transaction-cost analysis
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