EconPapers    
Economics at your fingertips  
 

Employment effects of foreign direct investment: New evidence from Central and Eastern European countries

Cristina Jude () and Monica Ioana Pop Silaghi

International Economics, 2016, vol. 145, issue C, 32-49

Abstract: This paper examines the role of FDI as a determinant of employment by using a dynamic labor demand model applied for a panel of 20 Central and Eastern European Countries during the period 1995–2012. Our results indicate that FDI leads to a phenomenon of creative destruction. The introduction of labor saving techniques leads to an initial negative effect on employment, while the progressive vertical integration of foreign affiliates into the local economy eventually converges toward a positive long run effect. However, this phenomenon is only observed in EU countries. Our analysis thus gives partial support to the worries that FDI may displace jobs. Still, the relative importance of FDI as a determinant of employment is modest compared to economic restructuring and output growth. Finally, our results show evidence of a skill bias of production in foreign affiliates, as human capital favors a positive contribution of FDI to employment.

Keywords: FDI; Employment; Labor demand; Transition countries; Dynamic panel (search for similar items in EconPapers)
JEL-codes: F23 J23 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (13) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2110701715000141
Full text for ScienceDirect subscribers only

Related works:
Journal Article: Employment Effects of Foreign Direct Investment: New evidence from Central and Eastern European Countries (2016) Downloads
Working Paper: Employment effects of foreign direct investment. New Evidence from Central and Eastern European Countries (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:145:y:2016:i:c:p:32-49

DOI: 10.1016/j.inteco.2015.02.003

Access Statistics for this article

International Economics is currently edited by Valerie Mignon and Marcelo Olarreaga

More articles in International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2021-12-11
Handle: RePEc:eee:inteco:v:145:y:2016:i:c:p:32-49