Foreign Direct Investment and the Organization of French Firms

Catherine Laffineur

Annals of Economics and Statistics, 2019, issue 135, 121-156

Abstract: This article examines how foreign direct investment (FDI) affects the work-organization and decentralization of decisions within headquarters. The first part of the paper develops a model of firms organization in an open economy to examine how FDI affects firms workforce composition and worker autonomy. The second part of the paper focuses on empirically testing the predictions of the model by using a unique comprehensive dataset on French manufacturing firms. I use difference-in-difference techniques combined with propensity score matching on multinational firms and show that the number of workers performing supervision activities significantly rises. Creating an original index for workforce autonomy, I also show that it increases after FDI. Thus, FDI is a significant means for fostering both decentralization of decisions and re-organization of activities towards supervisory activities.

Keywords: FDI; Tasks; Inequality; Firm organization. (search for similar items in EconPapers)
JEL-codes: D21 D23 F16 J21 J24 J31 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Working Paper: Foreign Direct Investment and the Organization of French Firms (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2019:i:135:p:121-156

DOI: 10.15609/annaeconstat2009.135.0121

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