Abstract
How does outward foreign direct investment (FDI) affect employment growth of the multinational corporations (MNCs) in the home country? Does the impact of outward investment differ by the level of development of the destination country of the FDI? Using a difference-in-difference approach, we assess the impact of starting to invest in less-advanced countries compared with investing in more-advanced countries. To obtain suitable control groups in each case, we use the propensity score method to select national firms that ex post did not take the investment decisions that we study even though ex ante they would have been equally likely to. We find that moving to less-advanced countries decreases a company's employment growth rate especially in the short run. On the other hand, moving to more-advanced countries does not consistently affect employment growth in any significant way. Including investment decisions of established multinationals in the estimation somewhat weakens but does not overturn this conclusion.
| Original language | English |
|---|---|
| Pages (from-to) | 301-309 |
| Number of pages | 9 |
| Journal | Journal of Development Economics |
| Volume | 91 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2010 Mar 1 |
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Keywords
- Foreign direct investment
- Labor demand
- Location choice
- Multinationals
ASJC Scopus subject areas
- Economics and Econometrics
- Development
Cite this
It matters where you go. Outward foreign direct investment and multinational employment growth at home. / Debaere, Peter; Lee, Hongshik; Lee, Joonhyung.
In: Journal of Development Economics, Vol. 91, No. 2, 01.03.2010, p. 301-309.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - It matters where you go. Outward foreign direct investment and multinational employment growth at home
AU - Debaere, Peter
AU - Lee, Hongshik
AU - Lee, Joonhyung
PY - 2010/3/1
Y1 - 2010/3/1
N2 - How does outward foreign direct investment (FDI) affect employment growth of the multinational corporations (MNCs) in the home country? Does the impact of outward investment differ by the level of development of the destination country of the FDI? Using a difference-in-difference approach, we assess the impact of starting to invest in less-advanced countries compared with investing in more-advanced countries. To obtain suitable control groups in each case, we use the propensity score method to select national firms that ex post did not take the investment decisions that we study even though ex ante they would have been equally likely to. We find that moving to less-advanced countries decreases a company's employment growth rate especially in the short run. On the other hand, moving to more-advanced countries does not consistently affect employment growth in any significant way. Including investment decisions of established multinationals in the estimation somewhat weakens but does not overturn this conclusion.
AB - How does outward foreign direct investment (FDI) affect employment growth of the multinational corporations (MNCs) in the home country? Does the impact of outward investment differ by the level of development of the destination country of the FDI? Using a difference-in-difference approach, we assess the impact of starting to invest in less-advanced countries compared with investing in more-advanced countries. To obtain suitable control groups in each case, we use the propensity score method to select national firms that ex post did not take the investment decisions that we study even though ex ante they would have been equally likely to. We find that moving to less-advanced countries decreases a company's employment growth rate especially in the short run. On the other hand, moving to more-advanced countries does not consistently affect employment growth in any significant way. Including investment decisions of established multinationals in the estimation somewhat weakens but does not overturn this conclusion.
KW - Foreign direct investment
KW - Labor demand
KW - Location choice
KW - Multinationals
UR - http://www.scopus.com/inward/record.url?scp=70350759655&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=70350759655&partnerID=8YFLogxK
U2 - 10.1016/j.jdeveco.2009.07.002
DO - 10.1016/j.jdeveco.2009.07.002
M3 - Article
AN - SCOPUS:70350759655
VL - 91
SP - 301
EP - 309
JO - Journal of Development of Economics
JF - Journal of Development of Economics
SN - 0304-3878
IS - 2
ER -