Determinants of Employment Growth at MNEs: Evidence from Egypt, India, South Africa and Vietnam
AbstractMany 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 InfoArticle provided by Palgrave Macmillan in its journal Comparative Economic Studies.
Volume (Year): 49 (2007)
Issue (Month): 1 (March)
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Other versions of this item:
- Bhaumik, Sumon K. & Estrin, Saul & Meyer, Klaus, 2004. "Determinants of Employment Growth at MNEs: Evidence from Egypt, India, South Africa and Vietnam," IZA Discussion Papers 1272, Institute for the Study of Labor (IZA).
- Sumon Kumar Bhaumik & Klaus Meyer & Saul Estrin, 2004. "Determinants of Employment Growth at MNEs: Evidence from Egypt, India, South Africa and Vietnam," William Davidson Institute Working Papers Series 2004-707, William Davidson Institute at the University of Michigan.
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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