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This paper uses a large sample of Chinese cross-section firm-level data with comprehensive information about labor quality to investigate the relationship between labor quality and FDI distribution in China. Using parametric, IV-GMM and non-parametric techniques, the author finds that labor quality measured by education level plays an important role on deciding the distribution of FDI but labor quality measured by working certificates lose their significance. The author also finds that labor quality has a more significant impact on other foreign investments than HMT invested firms and the impacts of labor quality on FDI is strongly uneven across industries and provinces.
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