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The employment effects of foreign direct investment

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  • Konings, Jozef

    ()
    (European Investment Bank, Economic and Financial Studies)

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    Abstract

    Recognising three main channels of economic integration (labour migration, trade flows, and FDI), this paper focuses on the employment effects of FDI in Europe, addressing, in particular, concerns that EU firms will relocate jobs to low-wage countries in Central and Eastern Europe at the expense of jobs elsewhere in the European Union. European firm level data are used to document firm level differences in labour costs and productivity between high-wage and low-wage regions, thereby assessing the competitiveness of various regions. In addition, firm level data of over 1,000 European transnational corporations and their affiliates are used to analyse whether employment relocation between high-and low-wage regions occurs. The main finding is that employment relocation from west to east is not taking place, but there is evidence for employment relocation within high-wage European regions.

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    Bibliographic Info

    Paper provided by European Investment Bank, Economics Department in its series EIB Papers with number 4/2004.

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    Length: 23 pages
    Date of creation: 18 Jun 2004
    Date of revision:
    Handle: RePEc:ris:eibpap:2004_004

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    Related research

    Keywords: EU enlargement; low wage competition; relocation; job creation;

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    1. Brian Aitken & Ann Harrison & Robert E. Lipsey, 1995. "Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela and the United States," NBER Working Papers 5102, National Bureau of Economic Research, Inc.
    2. Jozef Konings & Alan Murphey, 2001. "Do Multinational Enterprises Substitute Parent Jobs for Foreign Ones? Evidence from Firm Level Panel Data," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 371, William Davidson Institute at the University of Michigan.
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    Cited by:
    1. Vittorio, Daniele & Ugo, Marani, 2008. "Organized Crime and Foreign Direct Investment: the Italian Case," MPRA Paper 7217, University Library of Munich, Germany.
    2. Mündler, Marc-Andreas & Becker, Sascha O., 2006. "Margins of multinational labor substitution," Discussion Paper Series 1: Economic Studies 2006,24, Deutsche Bundesbank, Research Centre.
    3. Daniele, Vittorio, 2007. "Criminalità e investimenti esteri. Un’analisi per le province italiane
      [The effect of organized crime on Foreign Investments. An Empirical Analysis for the Italian Provinces]
      ," MPRA Paper 6417, University Library of Munich, Germany.
    4. VINTILA DENISIA & Popescu Raluca Georgiana, 2012. "The Effects Of Foreign Direct Investments On Employment In Central And Eastern Europe. Focus On Romania And Poland," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 81-87, July.
    5. Enrico Marelli & Laura Resmini & Marcello Signorelli, 2014. "The Effects Of Inward Fdi On Regional Employment In Europe," Romanian Journal of Regional Science, Romanian Regional Science Association, Romanian Regional Science Association, vol. 8(1), pages 1-23, JUNE.
    6. Ingo Geishecker & Gabor Hunya, 2005. "Employment Effects of Foreign Direct Investment in Central and Eastern Europe," wiiw Research Reports 321, The Vienna Institute for International Economic Studies, wiiw.

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