The Effect of FDI on Job Separation

Marc-Andreas Muendler and Sascha Becker

University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego

Abstract: A novel linked employer-employee data set documents that expanding multinational enterprises retain more domestic jobs than competitors without foreign expansion. In contrast to prior research, a propensity score estimator allows enterprise performance to vary with foreign direct investment (FDI) and shows that the foreign expansion itself is the dominant explanatory factor for reduced worker separation rates. Bounding, concomitant variable tests, and robustness checks rule out competing hypotheses. The finding is consistent with the idea that, given global factor price differences, a prevention of enterprises from outward FDI would lead to more domestic worker separations. FDI raises domestic-worker retention more pronouncedly among highly educated workers and for expansions to distant locations.

Keywords: Multinational enterprises; international investment; demand for labor; worker layoffs; linked employer-employee data (search for similar items in EconPapers)
Date: 2006-11-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://www.escholarship.org/uc/item/28h3p82z.pdf;origin=repeccitec (application/pdf)

Related works:
Working Paper: The effect of FDI on job separation (2007)
Working Paper: The Effect of FDI on Job Separation (2006)
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:cdl:ucsdec:qt28h3p82z

Access Statistics for this paper

More papers in University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego Contact information at EDIRC.
Bibliographic data for series maintained by Lisa Schiff ().