1. BNU FDI Cluster and Labor Allocation Zheng Feihu, Beijing Normal University

2. BNU www.themegallery.com Company Logo Background: Location of FDI OLI Paradigm The location decision is a complex one By the 1980s,external demand and supply forces change the MNC management practices The particular choice of location within a country or free-trade area is now the central problem

3. BNU www.themegallery.com Company Logo Background: Industry Cluster Mutual Learning Good infrastructure Self- reinforcing mechanism

4. BNU www.themegallery.com Company Logo Our question is 1 Marshalls (1920) tripartite explanation Inform. spillovers, Skilled Labor pool, Local inputs 2 Porters(1990) industry cluster with the emphasis on the role played by local information 3 We want to know Whats the effects on the skilled labor pool?

5. BNU www.themegallery.com Company Logo Analytical framework: labor movement: personal revenue Vs cost firm cluster: organization revenue Vs cost Industry cluster: market structure

6. BNU www.themegallery.com Company Logo ( )labor movement Blue-collars decision: Urban Wage>Rural wage personal revenue Vs cost White-collars decision: Revenue>cost (Sunk cost and Living cost) Why the problem of Rural-Urban Migration shortage in south-china? Why the problem of human capital depreciation ?

7. BNU www.themegallery.com Company Logo ( ) firm cluster entrepreneurs decision based on Labor intensive competition organization revenue Vs cost Labor character. Unstable Non- identifiable Labor character. Stable relation identifiable entrepreneurs decision based on capital intensive competition entrepreneurs decision based on knowledge intensive competition

8. BNU www.themegallery.com Company Logo ( )industry cluster Pure agglomeration market structure Strategic innovation complex Rural-Urban Migration fluctuation? Zhu River triangle region of south china Professional workers allocation? Chang river triangle region of china Industry complex

9. BNU www.themegallery.com Company Logo Inter-relations 1 General labor : Atomistic allocated(1) Specific labor : Bounded allocated(2) Specific labor: Networked allocated(3) 2 Labor-intensive firm clusters(1) Capital-intensive Firm clusters(2) Knowledge- intensive firm clusters(3) 3 Pure agglomeration(1) Industry complex(2) Strategic Innovation complex(3)

10. BNU www.themegallery.com Company Logo future research: 11 Data intensive analysis of labor movements decision and information. 22 More indices of the nature and scope of the linkages between worker and entrepreneurs game 33 Deepening understanding of the linkages between the firm cluster and industry cluster, esp.based on the transaction-cost analysis

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