Research on Human Capital Strategy of Foreign Direct Investment Firms in Zhejiang Province

This paper studies the human capital strategy of foreign direct investment (FDI) firms, using Zhejiang Economic Census Data. The results reveal that in the above designated Size manufacturing firms, compared with domestic firms, FDI firms not only absorb higher level human capital, but also provide high wages to the same level human capital. The results show FDI firms are unwilling to invest in employees' human capital, which means it is not unambiguous that FDI firms promote human capital formation in host country by investing directly. This paper believes that the reason of FDI firms' providing less human capital investment is that wage structure of FDI firms is near competitive condition.