Exposure to OFDI and regional labour markets: evidence for routine and non-routine jobs in Great Britain

Who’s got the aces up his sleeve? Functional specialization of cities and entrepreneurship

Luisa Gagliardi, Simona Iammarino and Andrés Rodríguez-Pose

Journal of Economic Geography, 2021, vol. 21, issue 5, 783-806

Abstract: This article explores the role of subnational geography in the analysis of the consequences of Outward Foreign Direct Investment (OFDI) for workers performing different typologies of jobs. We qualify jobs according to their knowledge content, degree of tradability and response to agglomeration economies. While the former two dimensions are key to signal the intensity to OFDI exposure of different typologies of jobs, the latter contributes to explain the unequal spatial distribution of benefits and losses from OFDI in terms of job creation/destruction. We theorise areas that are more severely exposed to OFDI experience job losses in routine occupations, whereas they do not necessarily benefit from job creation in non-routine jobs. To test our hypothesis, we make use of a balanced panel dataset at the local labour market level, exploiting variations in OFDI exposure and in the job composition of local areas. Our findings—robust to numerous checks, including unobserved global and local trends—indicate that job losses concentrate in regions that were more exposed to OFDI based on their initial industry mix, and affect individuals performing mainly routine tasks. In these same areas, however, no significant effects are found when looking at job creation in non-routine occupations.

Keywords: OFDI; local labour markets; routine and non-routine occupations; home impact of MNCs (search for similar items in EconPapers)
JEL-codes: F21 F66 J24 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (10)

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Working Paper: Exposure to OFDI and regional labour markets: Evidence for routine and non-routine jobs in Great Britain (2021)
Working Paper: Exposure to OFDI and regional labour markets: evidence for routine and non-routine jobs in Great Britain (2021)
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