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FDI and onshore task composition: evidence from German firms with affiliates in the Czech Republic

Author

Listed:
  • Körner, Konstantin

    (Institute for Employment Research (IAB), Nuremberg, Germany)

  • Le Moigne, Mathilde

    (Princeton University, Princeton, USA ; University of Zurich)

Abstract

"How does a firm’s foreign direct investment (FDI) in a low-wage country change its onshore task demand in a high-wage country? Is the shift more intensive for jobs that the literature has designated offshorable? We address these questions using a matched difference-in-differences (DiD) approach with data on German firms that have similar propensities to conduct FDI in the Czech Republic. Our novel matching procedure draws on post-lasso logit estimates and shows that high task intensities of managing, administration, and labor legislation play a major role in firms’ engagement in international expansion. The outcomes of the DiD estimation show that after acquiring a foreign affiliate, multinational enterprises (MNEs) increase the intensities of their activities typical of headquarters such as managing, analyzing, and negotiating relative to the corresponding task intensities among non-MNEs. We also find sector-specific decreases, such as a reduction in typical production tasks (monitoring, producing, measuring) in manufacturing MNEs or typical service tasks (informing, medical, repairing) in service MNEs." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Körner, Konstantin & Le Moigne, Mathilde, 2023. "FDI and onshore task composition: evidence from German firms with affiliates in the Czech Republic," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 57, pages 1-025.
    • Handle: RePEc:iab:iabjlr:v:57:i::p:a025
    DOI: 10.1186/s12651-023-00346-7
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    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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