Curse or blessing? multinational corporations and labor market outcomes in Africa

Mariapia Mendola (), Giovanni Prarolo () and Tommaso Sonno ()
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Mariapia Mendola: University of Milan Bicocca, IZA, and LdA
Giovanni Prarolo: University of Bologna, CEPR, and LdA
Tommaso Sonno: University of Bologna, and CEP-LSE

Review of World Economics (Weltwirtschaftliches Archiv), 2025, vol. 161, issue 1, No 10, 339-371

Abstract: Abstract Do multinational enterprises create local job opportunities in developing countries? We address this question in the context of Sub-Saharan Africa by combining information on domestic and foreign multinationals’ affiliates over more than a decade with geolocalised individual-level data on labor supply. Having a multinational’s affiliate within walking distance correlates with an increase in employment of about +4% with respect to the sample mean. Multinationals’ activity is correlated with higher off–farm and lower on–farm employment (+13% and −7%, respectively), a result driven by affiliates of foreign companies. Female employment and "good jobs" increase around affiliates, but only when they are part of foreign groups. A battery of robustness checks and a retrospective analysis exploiting time variation in the individual labor market entry deliver qualitatively similar results, suggesting our findings do not suffer major identification issues.

Keywords: Multinational enterprises; Labor supply; Job quality; Spatial analysis; Africa (search for similar items in EconPapers)
JEL-codes: F16 F23 F66 J01 O12 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10290-024-00547-3

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