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Multinational enterprises, industrial relatedness and employment in European regions

Nicola Cortinovis (), Riccardo Crescenzi and Frank van Oort ()

No 1802, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: This paper looks at the link between Multinational Enterprises (MNEs) and employment in local firms in their host regions. The paper cross-fertilizes the literature on MNE spillovers with the emerging body of research on industrial relatedness. This paper empirically tests the link between industrial relatedness and MNE impacts on employment by capturing various types of horizontal and vertical similarities across industries. The focus of our study is on employment in European NUTS2 regions. The empirical analysis shows that cross-sectoral MNE spillovers among cognitively related industries are positive and significant, confirming that industrial relatedness is an important driver of employment-enhancing spillovers from MNE activities. However, positive effects of MNEs on domestic employment are contingent upon the modeling of both regional and industrial heterogeneity

Keywords: Foreign direct investment (FDI); relatedness; employment; Europe; regions (search for similar items in EconPapers)
JEL-codes: O33 F22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo and nep-hpe
Date: 2018-01, Revised 2018-01
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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:1802

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