Abstract: In the context of China's large and medium-sized enterprises in foreign direct investment in full swing and small micro-enterprises' development being in difficult situation, from the perspective of corporate heterogeneity, this paper systematically examines the impact of large and medium-sized enterprises' foreign direct investment on the employment of small and medium enterprises in the home country. On the basis of clarifying the influence mechanism of the large and medium-sized enterprises OFDI to the employment mechanism of small micro-enterprises, this paper use of China's 2001 to 2013 panel data to verify the theoretical analysis of the conclusions. The study found that, on the whole, China's large and medium-sized enterprises have a significant impact on the employment of small and medium enterprises in the home country, and the net effect is positive;from the results of sub-regional estimates, the impact of large and medium-sized foreign direct investment on the employment of small micro-enterprises exists spatial heterogeneity;The level of financial development in the region plays an important role in the impact of large and medium-sized enterprises OFDI on the employment of small and medium enterprises in the home country.

Key words: OFDI, small micro-enterprises, large and medium-sized enterprises, enterprise heterogeneity