Jobs, FDI and Institutions in Sub-Saharan Africa: Evidence from Firm-Level Data

Sotiris Blanas, Adnan Seric () and Christian Viegelahn

No 152465485, Working Papers from Lancaster University Management School, Economics Department

Abstract: Using firm-level data, we study the differences in the quantity and quality of jobs offered by foreign-owned and domestic firms in Sub-Saharan Africa, and identify how country-level institutional factors determine these differences. After controlling for numerous firm-level characteristics in regressions, we find that foreign-owned firms, especially those whose main business purpose is to serve the home or foreign markets, offer more stable and secure jobs than domestic firms. Specifically, they have more permanent full-time workers, a lower probability of offering temporary work and employ less temporary workers. The job stability and security advantage of foreign-owned firms is smaller in countries with higher firing costs and governance quality, where domestic firms are induced to offer more stable and secure jobs. In addition, foreign-owned firms are less likely to offer unpaid work and have less of these workers. They also invest more in training, especially of managers, and pay higher wages to non-production and managerial workers, particularly those firms whose main business purpose is to serve the home or foreign markets. A higher wage to production workers is paid only by those whose owners are from high-income countries. The wage premia of foreign-owned firms are lower in countries with higher governance and social policy standards, where domestic firms are induced to pay higher wages.

Keywords: Job quantity; Job quality; FDI; Institutions; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: F14 F16 F21 F23 F66 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-afr, nep-bec and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Jobs, FDI and institutions in Sub-Saharan Africa evidence from firm-level data (2017)
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