Speaker: Yifan Zhang, Associate Professor, Lingnan University
Host: Jipeng Zhang, Associate professor, RIEM
Time: 2:30PM-4:00PM, March 6, Friday
Venue: Yide Building H503, Liulin Campus
Abstract: This paper studies how foreign direct investment (FDI) contributes to cultural convergence across countries. Specifically, we focus on whether multinational firms transfer corporate culture of hiring women to foreign affiliates and eventually to other local firms in the host country. To guide our empirical analysis, we build a parsimonious multi-sector task-based model that features heterogeneity in firm productivity and their biases towards female workers. Workers are differentiated by gender, with women having a comparative advantage in skill-intensive versus brawn-intensive tasks, and sectors differing in their dependence on these tasks. Discrimination lowers profits. Increased prevalence of foreign firms induces discriminating firms to increase female employment, due to both competition and imitation. Using a large manufacturing firm data set from China over the 2004-2007 period, we find that foreign-invested enterprises (FIEs) from countries with lower gender inequality tend to hire proportionately more women and are more likely to appoint female managers. In addition to the within-firm cultural transfer, we find evidence of cultural spillover from FIEs to local firms. Such effects are stronger in sectors in which females have a comparative advantage, for the less productive firms, and from FIEs whose home countries are less biased against women. These results support our model predictions and show that FDI lowers gender inequality through channels beyond the competition effect proposed by Becker (1957). Our results highlight an unexplored externalities of FDI, in addition to technology and managerial spillover as emphasized by existing studies.
About the speaker: Yifan Zhang is an associate professor of economics at Lingnan University, Hong Kong. He received Ph.D from University of Pittsburgh. Before joining Lingnan, he worked as post-doc associate at Yale University. Dr. Zhang's main research interests includes Chinese economy, international economics, and industrial organization. He has published extensively on renowned international journals including Journal of International Economics, Journal of Development Economics, Journal of Comparative Economics, etc. His personal web site is http://www.ln.edu.hk/econ/staff/yfzhang.
