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Much ado about nothing: No fear of becoming a multinational

Amaia Altuzarra (), Ricardo Bustillo () and Carlos Rodríguez

International Business Review, 2018, vol. 27, issue 1, 56-65

Abstract: This paper compares the home employment performance of Spanish “switching” companies, which carry out Foreign Direct Investment for the first time, with employment performance corresponding to non investing local (national) companies. We use data from manufacturing firms for the period 2000–2013. The counterfactual group of national companies is obtained using the Propensity Score Matching technique with a large sample of firms. The analysis shows that the reduction in employment was less relevant among switching companies in comparison with local ones. This result permits us to conclude that internationalization through foreign direct investment is not causing a more intense reduction in employment among parent companies than among local firms. This holds also true for the period prior to the crisis (2000–2007).

Keywords: Difference in difference estimation; Propensity score matching; Outward foreign direct investment; Employment; Internationalization (search for similar items in EconPapers)
Date: 2018
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