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
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Comparative Economic Studies.
Volume (Year): 49 (2007)
Issue (Month): 1 (March)
Contact details of provider:
Web page: http://www.palgrave-journals.com/
Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Other versions of this item:
- 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.
- 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).
- 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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kreye O & Frobel F & Heinrichs J, 1988. "Multinational enterprises and employment," ILO Working Papers 263152, International Labour Organization.
- Hill, Hal, 1982. "Vertical Inter-Firm Linkages in LDCs: A Note on the Philippines," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 44(3), pages 261-71, August.
- Mansfield, Edwin & Romeo, Anthony, 1980. "Technology Transfer to Overseas Subsidiaries by U.S.-Based Firms," The Quarterly Journal of Economics, MIT Press, vol. 95(4), pages 737-50, December.
- Gleason, Kimberly C. & Lee, Chun I & Mathur, Ike, 2002. "Dimensions of international expansions by US firms to China: Wealth effects, mode selection, and firm-specific factors," International Review of Economics & Finance, Elsevier, vol. 11(2), pages 139-154, May.
- Gershenberg, Irving, 1987. "The training and spread of managerial know-how, a comparative analysis of multinational and other firms in Kenya," World Development, Elsevier, vol. 15(7), pages 931-939, July.
- Klaus E Meyer, 2004. "Perspectives on multinational enterprises in emerging economies," Journal of International Business Studies, Palgrave Macmillan, vol. 35(4), pages 259-276, July.
- Mohsin Habib & Leon Zurawicki, 2002. "Corruption and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan, vol. 33(2), pages 291-307, June.
- Joshua Aizenman, 2002.
"Volatility, employment and the patterns of FDI in emerging markets,"
NBER Working Papers
9397, National Bureau of Economic Research, Inc.
- Aizenman, Joshua, 2003. "Volatility, employment and the patterns of FDI in emerging markets," Journal of Development Economics, Elsevier, vol. 72(2), pages 585-601, December.
- Watanabe, S, 1980. "Multinational enterprises and employment-oriented 'appropriate' technologies in developing countries," ILO Working Papers 208700, International Labour Organization.
- Jean-François Hennart & Young-Ryeol Park, 1993.
"Greenfield vs. Acquisition: The Strategy of Japanese Investors in the United States,"
INFORMS, vol. 39(9), pages 1054-1070, September.
- Hennart, J.-F. & Park, Y.R., 1993. "Greenfield vs. Acquisition : the strategy of Japanes investors in the United states," Open Access publications from Tilburg University urn:nbn:nl:ui:12-174430, Tilburg University.
- Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Gorg, Holger & Strobl, Eric, 2001. "Multinational Companies and Productivity Spillovers: A Meta-analysis," Economic Journal, Royal Economic Society, vol. 111(475), pages F723-39, November.
- Findlay, Ronald, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 1-16, February.
- Yadong Luo, 2001. "Determinants of Entry in an Emerging Economy: A Multilevel Approach," Journal of Management Studies, Wiley Blackwell, vol. 38(3), pages 443-472, 05.
- Lall, S, 1979. "The indirect employment effects of multinational enterprises in developing countries," ILO Working Papers 200795, International Labour Organization.
- Ethier, Wilfred J, 1986. "The Multinational Firm," The Quarterly Journal of Economics, MIT Press, vol. 101(4), pages 805-33, November.
- Sinha, Uday Bhanu, 2001. "International joint venture, licensing and buy-out under asymmetric information," Journal of Development Economics, Elsevier, vol. 66(1), pages 127-151, October.
- Noorbakhsh, Farhad & Paloni, Alberto & Youssef, Ali, 2001. "Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence," World Development, Elsevier, vol. 29(9), pages 1593-1610, September.
- Ramachandran, Vijaya, 1993. "Technology Transfer, Firm Ownership, and Investment in Human Capital," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 664-70, November.
- Hasan, Rana, 2002. "The impact of imported and domestic technologies on the productivity of firms: panel data evidence from Indian manufacturing firms," Journal of Development Economics, Elsevier, vol. 69(1), pages 23-49, October.
- Patibandla, Murali & Petersen, Bent, 2002. "Role of Transnational Corporations in the Evolution of a High-Tech Industry: The Case of India's Software Industry," World Development, Elsevier, vol. 30(9), pages 1561-1577, September.
- Peter J Buckley & Mark C Casson, 1998. "Analyzing Foreign Market Entry Strategies: Extending the Internalization Approach," Journal of International Business Studies, Palgrave Macmillan, vol. 29(3), pages 539-561, September.
- 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.
- Tomasz Mickiewicz & Christopher Gerry & Kate Bishop, .
"Privatisation, Corporate Control and Employment Growth: Evidence From A Panel of Large Polish Firms, 1996-2002,"
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).
- Mickiewicz, Tomasz & Gerry, Christopher J. & Bishop, Kate, 2005. "Privatisation, corporate control and employment growth: Evidence from a panel of large Polish firms, 1996-2002," Economic Systems, Elsevier, vol. 29(1), pages 98-119, March.
- Villa, Stefania, 2010. "Exploring the linkages between investment and employment in Moldova : a time-series analysis," ILO Working Papers 455342, International Labour Organization.
- Nassar, Heba, 2011. "Growth, employment policies and economic linkages : Egypt," ILO Working Papers 465279, International Labour Organization.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Gale).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.