chapter  7
Foreign Direct Investment and Gendered Wages in Urban China
ByElissa Braunstein, Mark Brenner
Pages 25

Many economists and policy-makers treat foreign direct investment (FDI) as a premier agent of economic growth in developing countries. Especially since the financial crises of the late 1990s, when short-term capital flows proved to be unreliable and destabilizing, governments have courted FDI as the international capital flow of choice.1 In addition to directly raising investment and consequent growth, FDI is often lauded for expanding employment opportunities, introducing technological and managerial know-how, and providing valuable access to highly competitive export markets. As a result, for many developing economies, FDI has become one of the most sought-after commodities in the global marketplace. Even so, the empirical evidence for a causal connection between FDI and

growth, to say nothing of broad development, is actually quite weak – certainly not enough to support the types of subsidies that many developing country governments have begun to offer multinational investors (Gordon H. Hanson 2005). Yet for all of the uncertainty over whether FDI in fact helps industrializing countries, we know even less about its effects from a gender perspective. In this study, we investigate China, the largest recipient of FDI in the developing world – indeed, one of the largest in the world. By assessing the effect of FDI on gender-based wages in urban China, we shed light on one of the key social and developmental impacts of both globalization and FDI.