The Effect of FDI on Job Security

Citation

Becker S & Muendler M (2008) The Effect of FDI on Job Security. BE Journal of Economic Analysis and Policy, 8 (1), p. Article 8. http://www.bepress.com/bejeap/vol8/iss1/art8/#; https://doi.org/10.2202/1935-1682.1770

Abstract
Novel linked employer-employee data for multinational enterprises and their global workforces show that multinational enterprises that expand abroad retain more domestic jobs than competitors without foreign expansions. Propensity-score estimation demonstrates that the foreign expansion itself is a dominant explanatory factor for reduced worker separation rates. Bounding, concomitant variable tests, and further robustness checks show competing hypotheses to be less plausible. The finding is consistent with the hypothesis that, given global wage differences, a prevention of enterprises from outward FDI would lead to more domestic job losses. FDI raises domestic-worker retention more pronouncedly among highly educated workers.

Keywords
multinational enterprises; international investment; demand for labor; worker layoffs; linked employer-employee data; JEL Classifcation: F21, F23, J23, J63; Investments, Foreign; International business enterprises; Job security

Journal
BE Journal of Economic Analysis and Policy: Volume 8, Issue 1

• Becker Muendler 2008 BEJEAP-Advances The Effect of FDI on Job Security.pdf