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Determinants of Employment Growth at MNEs: Evidence from Egypt, India, South Africa and Vietnam

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  • Sumon Kumar Bhaumik

    ()
    (Brunel Business School, Brunel University, Social Sciences Building, Uxbridge, Middlesex UB10 9NW, UK.)

  • Saul Estrin

    (London Business School, UK)

  • Klaus E Meyer

    (University of Reading, UK)

Abstract

Many foreign investment operations into emerging markets are small, and are likely to have only a limited impact on the local economy. However, host governments often expect transfer of advanced technology from multinational enterprises (MNEs) operating in these markets to local firms by way of inter-firm mobility of skilled labourers. The extent of such transfers would be limited, among other factors, by the size of the pool of skilled labourers that can potentially be mobile between MNEs and local firms. This, in turn, is determined by employment growth at the MNEs. We develop an empirical specification that models this employment growth, by drawing on both the economics and international business literature. This model is then estimated using firm-level data from four emerging markets. We find that wholly owned foreign direct investment operations have higher employment growth, while local industry and institutional characteristics moderate the growth effect. This suggests that policies encouraging foreign investors to set up in form of joint ventures may not actually raise the benefits for the host economy. Comparative Economic Studies (2007) 49, 61–80. doi:10.1057/palgrave.ces.8100161

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal Comparative Economic Studies.

Volume (Year): 49 (2007)
Issue (Month): 1 (March)
Pages: 61-80

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Handle: RePEc:pal:compes:v:49:y:2007:i:1:p:61-80

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Cited by:
  1. Anh Nguyen Ngoc & Nhat Nguyen Duc & Chuc Nguyen Dinh, 2011. "The Impact of the Economic Stimulus on Domestic, Private Enterprises," Working Papers 06, Development and Policies Research Center (DEPOCEN), Vietnam.
  2. Tomasz Mickiewicz & Christopher Gerry & Kate Bishop, . "Privatisation, Corporate Control and Employment Growth: Evidence From A Panel of Large Polish Firms, 1996-2002," Working Papers 47 Key Words: employment,, CENTRE FOR THE STUDY OF ECONOMIC AND SOCIAL CHANGE IN EUROPE,School of Slavonic and East European Studies,University College London (SSEES,UCL).
  3. Villa, Stefania, 2010. "Exploring the linkages between investment and employment in Moldova : a time-series analysis," ILO Working Papers 455342, International Labour Organization.
  4. Nassar, Heba, 2011. "Growth, employment policies and economic linkages : Egypt," ILO Working Papers 465279, International Labour Organization.

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