The effects at home of initiating production abroad: evidence from matched French firms

Alexander Hijzen, Sebastien Jean and Thierry Mayer

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Abstract: Based on matching techniques in combination with a difference-in-difference estimator, this paper estimates the effects at home of initiating production abroad through the establishment of a foreign production affiliate. The analysis covers manufacturing and service firms active in France during the period 1987-1999. We show that the motivation to start producing abroad is an important determinant of its impact at home. Market-seeking foreign direct investment (FDI) in manufacturing is associated with significant scale effects, resulting in job creation. By contrast, factor-seeking FDI in manufacturing has no significant effect on employment. However, there is some evidence that this type of FDI is associated with technology effects, in the form of greater capital-intensity and efficiency, as well as larger exports. Finally, FDI in service sectors is associated with significant positive employment effects, presumably reflecting the importance of the market-seeking motive in these sectors.

Keywords: Foreign direct investment; Multinationals; Propensity score matching; Services; Delocalisation; F14; F21; F23 (search for similar items in EconPapers)
Date: 2011-03-20
Note: View the original document on HAL open archive server: https://hal.science/hal-00680707v1
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Citations: View citations in EconPapers (85)

Published in Review of World Economics, 2011, 147 (3), pp.457-483. ⟨10.1007/s10290-011-0094-x⟩

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Related works:
Journal Article: The effects at home of initiating production abroad: evidence from matched French firms (2011)
Working Paper: The effects at home of initiating production abroad: evidence from matched French firms (2011)
Working Paper: The effects at home of initiating production abroad: evidence from matched french firms (2011)
Working Paper: The effects at home of initiating production abroad: evidence from matched french firms (2011)
Working Paper: The Effects at Home of Initiating Production Abroad: Evidence from Matched French Firms (2009)
Working Paper: The Effects at Home of Initiating Production Abroad: Evidence from Matched French Firms (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00680707

DOI: 10.1007/s10290-011-0094-x

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