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

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Author Info

  • Bhaumik, Sumon K.

    ()
    (University of Sheffield)

  • Estrin, Saul

    ()
    (London School of Economics)

  • Meyer, Klaus

    ()
    (Copenhagen Business School)

Abstract

Foreign investors are expected to contribute to economic development through a variety of channels. However, many foreign investment operations are small, and almost insignificant in their impact on the local environment. An important indication of the potential contribution of foreign investors is thus their employment growth. Employees working for, and trained by, a multinational enterprise may become carriers of new technology and business practices. The more employees receive access to new knowledge, the more they in turn may spread the knowledge across the economy, for instance by setting up their own businesses. In this paper, we make a first step in investigating the determinants of this important mediating variable, employment growth. For a dataset covering four diverse emerging economies, we find that wholly-owned FDI operations have higher employment growth, while local industry characteristics moderate the growth effect.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1272.

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Length: 25 pages
Date of creation: Aug 2004
Date of revision:
Publication status: published in: Comparative Economic Studies, 2007, 49 (1), 61-80
Handle: RePEc:iza:izadps:dp1272

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Keywords: FDI policy; control; employment growth; MNE; institutions;

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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. 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.
  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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