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Multinational enterprises, industrial relatedness and employment in European regions
[Innovation: mapping the winds of creative destruction]

Author

Listed:
  • Nicola Cortinovis
  • Riccardo Crescenzi
  • Frank van Oort

Abstract

This article investigates the link between multinational enterprises (MNEs) and employment in their host regions by cross-fertilising the literature on MNE externalities with the emerging body of research on industrial relatedness. The link between employment and MNE presence in the same and related industries is tested for European regions. The results suggest that cross-sectoral MNE spillovers are mediated through industrial relatedness and that they are positively and significantly associated with higher employment levels, independently of input–output relations. Our results indicate that regions characterised by lower factor prices are likely to benefit the most from the presence of multinationals in terms of employment, but these benefits are concentrated in high knowledge-intensive sectors, potentially fostering inequalities within less-developed economies.

Suggested Citation

  • Nicola Cortinovis & Riccardo Crescenzi & Frank van Oort, 2020. "Multinational enterprises, industrial relatedness and employment in European regions [Innovation: mapping the winds of creative destruction]," Journal of Economic Geography, Oxford University Press, vol. 20(5), pages 1165-1205.
    • Handle: RePEc:oup:jecgeo:v:20:y:2020:i:5:p:1165-1205.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbaa010
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    Cited by:

    1. Yang, Dong & Li, Chengkun & Li, Lu & Lai, Kee-hung & Lun, Venus Y.H., 2022. "Maritime cluster relatedness and policy implications," Transport Policy, Elsevier, vol. 128(C), pages 76-88.
    2. Riccardo Crescenzi & Arnaud Dyèvre & Frank Neffke, 2022. "Innovation Catalysts: How Multinationals Reshape the Global Geography of Innovation," Economic Geography, Taylor & Francis Journals, vol. 98(3), pages 199-227, May.
    3. Jesús Peiró‐Palomino & Andrés J. Picazo‐Tadeo & Vicente Rios, 2020. "Well‐being in European regions: Does government quality matter?," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 555-582, June.
    4. Lisa Gianmoena & Vicente Rios, 2018. "The Determinants of Resilience in European Regions During the Great Recession: a Bayesian Model Averaging Approach," Discussion Papers 2018/235, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    5. Ron Boschma, 2021. "Global Value Chains from an Evolutionary Economic Geography perspective: a research agenda," Papers in Evolutionary Economic Geography (PEEG) 2134, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2021.
    6. Pierre-Alex Balland & Ron Boschma, 2024. "An Evolutionary Approach to Regional Development Traps in European Regions," Papers in Evolutionary Economic Geography (PEEG) 2420, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2024.
    7. N. Cortinovis & D. Zhang & R. Boschma, 2024. "Regional diversification and intra-regional wage inequality in the Netherlands," Regional Studies, Taylor & Francis Journals, vol. 58(12), pages 2292-2306, December.
    8. Riccardo Crescenzi & Roberto Ganau, 2025. "Inward FDI and regional performance in Europe after the Great Recession," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 18(1), pages 167-192.
    9. 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.
    10. Ron Boschma, 2024. "An evolutionary approach to regional studies on global value chains," Regional Studies, Taylor & Francis Journals, vol. 58(7), pages 1492-1500, July.
    11. Nicola Cortinovis & Zhiling Wang & Hengky Kurniawan, 2021. "Industrial Relatedness in MNE Spillovers over Geographical Space," Papers in Evolutionary Economic Geography (PEEG) 2111, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2021.
    12. Yibo Qiao & Andrea Ascani & Andrea Morrison, 2024. "External linkages and regional diversification in China: The role of foreign multinational enterprises," Environment and Planning A, , vol. 56(4), pages 1077-1101, June.
    13. Mattie Landman & Sanna Ojanperä & Stephen Kinsella & Neave O’Clery, 2023. "The role of relatedness and strategic linkages between domestic and MNE sectors in regional branching and resilience," The Journal of Technology Transfer, Springer, vol. 48(2), pages 515-559, April.
    14. Yibo Qiao & Nicola Cortinovis & Andrea Morrison, 2024. "MNE spillovers and local export dynamics in China: the role of relatedness and forward–backward linkages," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 14(4), pages 1023-1051, December.
    15. Xiyan Mao & Peiyu Wang, 2023. "Import–export nexus and China's emerging trade in environmental goods," Growth and Change, Wiley Blackwell, vol. 54(1), pages 157-181, March.
    16. Pinheiro, Flávio L. & Hartmann, Dominik & Boschma, Ron & Hidalgo, César A., 2022. "The time and frequency of unrelated diversification," Research Policy, Elsevier, vol. 51(8).
    17. Ziliang Liu & Shengjun Zhu, 2021. "Changing institutional context and regional industrial dynamics: New evidence from the establishment of administrative approval centers in China," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1271-1294, September.
    18. R. Boschma & Eduardo Hernández-Rodríguez & A. Morrison & C. Pietrobelli, 2021. "Do global value chains and local capabilities matter for economic complexity in EU regions?," Papers in Evolutionary Economic Geography (PEEG) 2139, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2021.
    19. Malgorzata Sztorc & Dorota Milek, 2022. "Modern Business Services as a Strategy for the Development of Smart Specializations," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 433-462.
    20. Jason Deegan & Tom Broekel & Silje Haus-Reve & Rune Dahl Fitjar, 2024. "How regions diversify into new jobs: from related industries or related occupations?," Regional Studies, Taylor & Francis Journals, vol. 58(11), pages 1965-1980, November.

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    Keywords

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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