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Home Employment Effects of EU Firms’ Activities in Central and Eastern European Countries

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Author Info

  • Ludo Cuyvers

    ()

  • Michel Dumont

    ()

  • Glenn Rayp

    ()

  • Katrien Stevens

    ()

Abstract

We examine whether or not affiliate production in Central and Eastern Europe (CEEC) affects factor demand in the EU, at the investing firm and sector levels. Using firm level data, we estimate parent labor demand elasticities for a number of manufacturing sectors, following a flexible cost function approach. We find evidence of inter-sector heterogeneity, but not of a substantially greater impact in “low-skilled†intensive sectors. Labor demand in the EU is affected by FDI in the CEEC, both at the investing firm and sector levels. It has a significant sector and non-sector component. Copyright Springer Science + Business Media, Inc. 2005

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File URL: http://hdl.handle.net/10.1007/s11079-005-5873-3
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Bibliographic Info

Article provided by Springer in its journal Open Economies Review.

Volume (Year): 16 (2005)
Issue (Month): 2 (April)
Pages: 153-174

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Handle: RePEc:kap:openec:v:16:y:2005:i:2:p:153-174

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Web page: http://www.springerlink.com/link.asp?id=100323

Related research

Keywords: employment; investment; multinational firms;

References

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  1. Claudia M. Buch & Robert M. Kokta & Daniel Piazolo, 2001. "Does the East Get What Would Otherwise Flow to the South? FDI Diversion in Europe," Kiel Working Papers 1061, Kiel Institute for the World Economy.
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  11. Riccardo Faini & Anna M. Falzoni & Marzio Galeotti & Rodolfo Helg & Alessandro Turrini, 2001. "Importing Jobs And Exporting Firms? On The Wage And Employment Implications Of Italy’S Trade And Foreign Direct Investment Flows," International Trade 0103002, EconWPA.
  12. S. Lael Brainard & David A. Riker, 1997. "Are U.S. Multinationals Exporting U.S. Jobs?," NBER Working Papers 5958, National Bureau of Economic Research, Inc.
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  15. Matthew J. Slaughter, 1995. "Multinational Corporations, Outsourcing, and American Wage Divergence," NBER Working Papers 5253, National Bureau of Economic Research, Inc.
  16. Riccardo Faini & Anna M. Falzoni & Marzio Galeotti & Rodolfo Helg & Alessandro Turrini, 1999. "Importing Jobs and Exporting Firms? On the Wage and Employment Implications of Italian Trade and Foreign Direct Investment Flows," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 58(1), pages 95-135, April.
  17. Ludo Cuyvers & Michel Dumont & Glenn Rayp & Katrien Stevens, 2003. "Wage and employment effects in the EU of international trade with the emerging economies," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 139(2), pages 248-275, June.
  18. Donald S. Siegel & Catherine J. Morrison Paul, 1999. "Scale Economies and Industry Agglomeration Externalities: A Dynamic Cost Function Approach," American Economic Review, American Economic Association, vol. 89(1), pages 272-290, March.
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Citations

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Cited by:
  1. Cesare Imbriani & Rosanna Pittiglio & Filippo Reganati, 2011. "Outward Foreign Direct Investment and Domestic Performance: the Italian Manufacturing and Services Sectors," Atlantic Economic Journal, International Atlantic Economic Society, vol. 39(4), pages 369-381, December.
  2. Jaan Masso & Urmas Varblane & Priit Vahter, 2007. "The Impact Of Outward Fdi On Home-Country Employment In A Low-Cost Transition Economy," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 52, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  3. Ludo Cuyvers & Reth Soeng, 2011. "The effects of Belgian outward direct investment in European high-wage and low-wage countries on employment in Belgium," International Journal of Manpower, Emerald Group Publishing, vol. 32(3), pages 300-312, July.
  4. Martin Falk & Yvonne Wolfmayr, 2010. "The substitutability between parent company and foreign affiliate employment in Europe," Empirica, Springer, vol. 37(1), pages 87-100, February.

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