Advanced Search
MyIDEAS: Login to save this paper or follow this series

The impact of outward FDI on the domestic perimeter of manufacturing groups

Contents:

Author Info

  • Alexandre Gazaniol

    ()
    (Université Paris Dauphine, LEDa UMR 225 DIAL, IRD)

Registered author(s):

    Abstract

    (english) This article aims to analyze the structure and the performance of multinational firms at the group level, and to estimate the impact of outward FDI on the domestic perimeter of manufacturing groups. This empirical work anticipates a major reshape of business statistics, which does not consider Legal Entities (LEs) as the relevant unit for economic analysis. In order to construct new statistical units which enjoy some degrees of autonomy, we use a French dataset (“LiFi”) which allows gathering all French LEs which belong to the same group. We show that nearly all multinational firms in the French manufacturing sector are organized around several LEs and we describe the implications of this organizational choice in terms of market structure and performance. Following firms which invest abroad for the first time reveals that outward FDI has a positive effect on the whole domestic perimeter of groups, since value-added, employment and exports significantly increase ex-post. The growth of employment is especially high in companies dedicated to auxiliary functions so the share of employees in the manufacturing perimeter tends to decrease after the investment. _________________________________ (français) Cet article vise à analyser la structure et les performances des firmes multinationales au niveau des groupes de sociétés, et à estimer l’impact des IDE sortants sur le périmètre domestique des groupes industriels. Il s’inscrit dans une refonte des statistiques d’entreprises, qui vise à dépasser le niveau des entités juridiques pour adopter une définition économique de l’entreprise, tenant compte de son degré d’autonomie. Afin de construire de nouvelles unités statistiques jouissant d’une autonomie de décision, nous utilisons l’enquête LiFi, qui nous permet de rassembler les sociétés françaises appartenant à un même groupe. Nous montrons que presque toutes les firmes multinationales dans l’industrie manufacturière française s’organisent autour de plusieurs entités juridiques et nous décrivons les implications de ce choix organisationnel en termes de structure de marché et de performances. L’analyse en dynamique des firmes qui investissent à l’étranger pour la première fois révèle que les IDE sortants ont un impact positif sur l’ensemble du périmètre domestique des groupes, dont la valeur ajoutée, l’emploi et les exportations augmentent significativement ex-post. La croissance de l’emploi apparaît plus soutenue dans les sociétés dédiées aux fonctions en support de la production, ce qui suggère que les IDE sortants contribuent à la désindustrialisation des pays développés.

    Download Info

    If 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.
    File URL: http://www.dial.ird.fr/media/ird-sites-d-unites-de-recherche/dial/documents/publications/doc_travail/2012/2012-03
    File Function: First version, 2012
    Download Restriction: no

    Bibliographic Info

    Paper provided by DIAL (Développement, Institutions et Mondialisation) in its series Working Papers with number DT/2012/03.

    as in new window
    Length: 27 pages
    Date of creation: Apr 2012
    Date of revision:
    Handle: RePEc:dia:wpaper:dt201203

    Contact details of provider:
    Postal: 4, rue d'Enghien, 75010 Paris
    Phone: + 33 1 53 24 14 50
    Fax: + 33 1 53 24 14 51
    Email:
    Web page: http://www.dial.ird.fr/
    More information through EDIRC

    Related research

    Keywords: Multinational firms; business groups; profiling; FDI; relocations; firms performance; deindustrialization; skill upgrading.;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Alexander Hijzen & Sébastien Jean & Thierry Mayer, . "The Effects at Home of Initiating Production Abroad: Evidence from Matched French Firms," Discussion Papers 09/24, University of Nottingham, GEP.
    2. Giorgio Barba Navaretti & Davide Castellani & Anne-Célia Disdier, 2010. "How does investing in cheap labour countries affect performance at home? Firm-level evidence from France and Italy," Oxford Economic Papers, Oxford University Press, vol. 62(2), pages 234-260, April.
    3. Becker, Sascha O. & Ekholm, Karolina & Muendler, Marc-Andreas, 2009. "Offshoring and the Onshore Composition of Tasks and Skills," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7391, C.E.P.R. Discussion Papers.
    4. Castellani, Davide & Mariotti, Ilaria & Piscitello, Lucia, 2008. "The impact of outward investments on parent company's employment and skill composition: Evidence from the Italian case," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 19(1), pages 81-94, March.
    5. Head, Keith & Ries, John, 2002. "Offshore production and skill upgrading by Japanese manufacturing firms," Journal of International Economics, Elsevier, Elsevier, vol. 58(1), pages 81-105, October.
    6. Bandick, Roger & Karpaty, Patrik, 2011. "Employment effects of foreign acquisition," International Review of Economics & Finance, Elsevier, Elsevier, vol. 20(2), pages 211-224, April.
    7. Yeaple, Stephen & Helpman, Elhanan & Melitz, Marc, 2004. "Export versus FDI with Heterogeneous Firms," Scholarly Articles 3229098, Harvard University Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:dia:wpaper:dt201203. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Loic Le Pezennec).

    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.