A BEJEAP Advances article.

Abstract

Novel linked employer-employee data for multinational enterprises and their global workforces show that multinational enterprises that expand abroad retain more domestic jobs than competitors without foreign expansions. Propensity-score estimation demonstrates that the foreign expansion itself is a dominant explanatory factor for reduced worker separation rates. Bounding, concomitant variable tests, and further robustness checks show competing hypotheses to be less plausible. The finding is consistent with the hypothesis that, given global wage differences, a prevention of enterprises from outward FDI would lead to more domestic job losses. FDI raises domestic-worker retention more pronouncedly among highly educated workers.

Submitted: March 24, 2007 · Accepted: February 15, 2008 · Published: April 2, 2008

Recommended Citation

Becker, Sascha O. and Muendler, Marc-Andreas (2008) "The Effect of FDI on Job Security," The B.E. Journal of Economic Analysis & Policy: Vol. 8 : Iss. 1 (Advances), Article 8.
DOI: 10.2202/1935-1682.1770
Available at: http://www.bepress.com/bejeap/vol8/iss1/art8