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Home Employment Effects of EU Firms’ Activities in Central and Eastern European Countries

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  • Ludo Cuyvers
  • Michel Dumont
  • Glenn Rayp
  • Katrien Stevens

Abstract

We examine whether or not affiliate production in Central and Eastern Europe (CEEC) affects factor demand in the EU, at the investing firm and sector levels. Using firm level data, we estimate parent labor demand elasticities for a number of manufacturing sectors, following a flexible cost function approach. We find evidence of inter-sector heterogeneity, but not of a substantially greater impact in “low-skilled” intensive sectors. Labor demand in the EU is affected by FDI in the CEEC, both at the investing firm and sector levels. It has a significant sector and non-sector component. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Ludo Cuyvers & Michel Dumont & Glenn Rayp & Katrien Stevens, 2005. "Home Employment Effects of EU Firms’ Activities in Central and Eastern European Countries," Open Economies Review, Springer, vol. 16(2), pages 153-174, April.
    • Handle: RePEc:kap:openec:v:16:y:2005:i:2:p:153-174
    DOI: 10.1007/s11079-005-5873-3
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    Cited by:

    1. Jaan Masso & Urmas Varblane & Priit Vahter, 2010. "The Impact Of Outward Fdi On Home-Country Employment In A Low-Cost Transition Economy," World Scientific Book Chapters, in: David A Dyker (ed.), Network Dynamics In Emerging Regions Of Europe, chapter 16, pages 333-360, World Scientific Publishing Co. Pte. Ltd..
    2. Oscar Bajo-Rubio & Carmen D Mora, 2015. "On the employment effects of outward FDI: the case of Spain, 1995-2011," Applied Economics, Taylor & Francis Journals, vol. 47(21), pages 2127-2141, May.
    3. D. Van den Poel, 2003. "Predicting Mail-Order Repeat Buying. Which Variables Matter?," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(3), pages 371-404.
    4. Martin Falk, 2008. "Testing Gibrat's Law for European Multinational Enterprises," WIFO Studies, WIFO, number 34231, Juni.
    5. Catherine Laffineur & El Mouhoud, 2015. "The jobs at risk from globalization: the French case," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(3), pages 477-531, August.
    6. Martin Falk & Yvonne Wolfmayr, 2008. "The Impact of Outward FDI in Central and Eastern Europe on Employment in the EU-15 Countries," WIFO Studies, WIFO, number 34232, Juni.
    7. Kokko, Ari, 2006. "The Home Country Effects Of Fdi In Developed Economies," EIJS Working Paper Series 225, Stockholm School of Economics, The European Institute of Japanese Studies.
    8. Riccardo Crescenzi & Roberto Ganau & Michael Storper, 2022. "Does foreign investment hurt job creation at home? The geography of outward FDI and employment in the USA," Journal of Economic Geography, Oxford University Press, vol. 22(1), pages 53-79.
    9. Cesare Imbriani & Rosanna Pittiglio & Filippo Reganati, 2011. "Outward Foreign Direct Investment and Domestic Performance: the Italian Manufacturing and Services Sectors," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 39(4), pages 369-381, December.
    10. Martin Falk & Yvonne Wolfmayr, 2010. "The substitutability between parent company and foreign affiliate employment in Europe," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(1), pages 87-100, February.
    11. Ludo Cuyvers & Emmanuel Dhyne & Reth Soeng, 2010. "The effects of internationalisation on domestic labour demand by skills : Firm-level evidence for Belgium," Working Paper Research 206, National Bank of Belgium.
    12. Cesare Imbriani & Rosanna Pittiglio & Filippo Reganati, 2014. "Affiliates and parent employment through foreign direct investment: a study case of substitutability or complementarity," International Economics and Economic Policy, Springer, vol. 11(4), pages 619-638, December.
    13. Ludo Cuyvers & Reth Soeng, 2011. "The effects of Belgian outward direct investment in European high‐wage and low‐wage countries on employment in Belgium," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(3), pages 300-312, June.
    14. DUMONT, Michel, "undated". "The social consequences of economic globalization," Working Papers 2006025, University of Antwerp, Faculty of Business and Economics.
    15. Youngho Kang & Unjung Whang, 2018. "To Whom Does Outward FDI Give Jobs?," Open Economies Review, Springer, vol. 29(3), pages 613-639, July.

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