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Resource Discoveries, FDI Bonanzas, and Local Multipliers: Evidence from Mozambique

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  • Gerhard Toews
  • Pierre-Louis Vezina

Abstract

We show that giant and unpredictable oil and gas discoveries trigger FDI bonanzas. Across developing countries, we document a 56% increase in FDI in the two years following a giant discovery. These booms are driven by new projects in sectors such as manufacturing, retail, services, and construction. To assess the job creation effects of one such FDI bonanza in Mozambique, we combine concurrent waves of household surveys and firm censuses and estimate the local job multiplier of FDI. Our estimates suggest that for each new FDI job, an additional 4.4 jobs are created locally, 2.1 of which are formal jobs.

Suggested Citation

  • Gerhard Toews & Pierre-Louis Vezina, 2022. "Resource Discoveries, FDI Bonanzas, and Local Multipliers: Evidence from Mozambique," The Review of Economics and Statistics, MIT Press, vol. 104(5), pages 1046-1058, December.
    • Handle: RePEc:tpr:restat:v:104:y:2022:i:5:p:1046-1058
    DOI: 10.1162/rest_a_00999
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    Cited by:

    1. Brian McCaig & Nina Pavcnik & Woan Foong Wong, 2022. "Foreign and Domestic Firms: Long Run Employment Effects of Export Opportunities," CESifo Working Paper Series 10168, CESifo.
    2. Raveh, Ohad & Zhang, Yan, 2024. "Giant Oil Discoveries and Long-Term Health Effects: Evidence from China," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 0(Preprint), January.

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