To Whom Does Outward FDI Give Jobs?

Youngho Kang and Unjung Whang ()
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Unjung Whang: Korea Institute for International Economic Policy

No 16-7, Working Papers from Korea Institute for International Economic Policy

Abstract: In this paper, we examine the impact of outward foreign direct investment (OFDI) on the overall employment, using Korean industry-level data for the period 2007-2014. We further decompose the effects of OFDI into types of foreign investment and workers' skill levels, separately for each employment status (permanent and temporary), so that we capture whether the MNEs initiating foreign investment prefer to employ temporary instead of permanent workers. Our main findings show that there is little evidence of the impact of OFDI on the overall industry employment of permanent workers, while OFDI is positively associated with the overall employment of temporary workers. Besides, OFDI leads to an increase in the number of jobs created for mediumskilled workers regardless of employment status, whereas there is a negative relationship between OFDI and the temporary employment of low-skilled workers. To be more specific, efficiency-seeking and export-platform-seeking types of OFDI is associated with an increase in the employment of mediumskilled workers.

Keywords: Foreign Direct Investment; Industry-level Employment; Skill Level; Employment Status (search for similar items in EconPapers)
JEL-codes: F20 J21 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2016-09-30
New Economics Papers: this item is included in nep-int
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http://dx.doi.org/10.2139/ssrn.2862289 Full text (application/pdf)

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Journal Article: To Whom Does Outward FDI Give Jobs? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwp:2016_007

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