Does It Matter Where You Invest? The Impact of FDI on Domestic Job Creation and Destruction
Hayato Kato and
MPRA Paper from University Library of Munich, Germany
This study uses unique division-level data of Japanese firms to examine how foreign direct investment (FDI) affects domestic employment. Contrary to most previous studies focusing on the effect on net employment growth, we decompose it into gross job creation and gross job destruction. We find that FDI destination plays an important role: FDI to Asia increases job creation, while FDI to Europe or North America decreases it. A frictional search-and-matching model with heterogeneous jobs can explain the differential effects. The model provides additional predictions on job creation and destruction by job type, which are also empirically confirmed.
Keywords: Outward FDI; firm-establishment-division-level data; multinational enterprises (MNEs); large-firm search model; high/low-skilled jobs (search for similar items in EconPapers)
JEL-codes: F23 J21 J23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cwa, nep-dge, nep-int, nep-lma, nep-sbm and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/105522/1/MPRA_paper_105522.pdf original version (application/pdf)
Working Paper: Does It Matter Where You Invest? The Impact of FDI on Domestic Job Creation and Destruction (2021)
Working Paper: Does It Matter Where You Invest? The Impact of FDI on Domestic Job Creation and Destruction (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:105522
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().