Foreign direct investment plays a major role in international production. Studies have suggested the impact of international production on the wage rate of labor market, often have different results and argument. Under the trend of globalization, the purpose of this study will investigate the impact of foreign direct investment on the employee compensation of agriculture, industry and services sectors. In the past literatures, also indicate that there exists positive correlation between international production and production technology, and there exists connection between production technology and labor wage. Thus, this study investigates the moderation effect of production technology between foreign direct investment and employee compensation. The dataset is consisted of the members of Organisation for economic Co-operation and Development (OECD) countries, and the period is from 2000 to 2014. The empirical analysis is using structural equation modeling (SEM) to explore the relationship of foreign direct investment, employee compensation, and production technology, where the factor of production technology is classified into the development of science and technology, and the accumulation of human capital to compare the effect of exogenous technology and endogenous technology. The main goals of this study are to resolve the trend of the influence level of employee compensation, and the trend of the effect of production technology.
