Foreign influence: The international transmission of gender equality

C. Austin Davis and Jennifer Poole

The World Economy, 2024, vol. 47, issue 4, 1478-1494

Abstract: Anecdotal evidence for several developing countries suggests that foreign direct investment and multinational enterprises (MNEs) may be an important conduit of cultural exchange. Recent work in economics has explored the role that MNEs play in transferring gender equality around the globe, but with mixed results. In this paper, we consider the implications of increased foreign direct investment in Brazil on the transmission of high‐quality gender policy and practice. In particular, we investigate whether workers with experience at multinational firms, now employed in domestic firms with no foreign influence, help to change gender‐specific outcomes at their Brazilian companies. We next ask whether it matters from where the foreign direct investment originates—that is, do workers with experience in MNEs with headquarters in relatively gender‐equal countries transfer best practices toward women better than do workers with experience in MNEs from relatively more gender‐unequal countries? Increasing the share of workers with MNE experience modestly improves the gender earnings gap in some specifications. Additionally, workers in management positions offer the strongest positive contributions to closing gender gaps. However, despite the many theoretical reasons and suggestive empirical evidence from previous literature to expect differential implications across FDI‐source countries, our data fail to support this notion.

Date: 2024
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