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Curse or blessing? multinational corporations and labor market outcomes in Africa

Author

Listed:
  • Mariapia Mendola

    (University of Milan Bicocca, IZA, and LdA)

  • Giovanni Prarolo

    (University of Bologna, CEPR, and LdA)

  • Tommaso Sonno

    (University of Bologna, and CEP-LSE)

Abstract

Do multinational enterprises create local job opportunities in developing countries? We address this question in the context of Sub-Saharan Africa by combining information on domestic and foreign multinationals’ affiliates over more than a decade with geolocalised individual-level data on labor supply. Having a multinational’s affiliate within walking distance correlates with an increase in employment of about +4% with respect to the sample mean. Multinationals’ activity is correlated with higher off–farm and lower on–farm employment (+13% and −7%, respectively), a result driven by affiliates of foreign companies. Female employment and "good jobs" increase around affiliates, but only when they are part of foreign groups. A battery of robustness checks and a retrospective analysis exploiting time variation in the individual labor market entry deliver qualitatively similar results, suggesting our findings do not suffer major identification issues.

Suggested Citation

  • Mariapia Mendola & Giovanni Prarolo & Tommaso Sonno, 2025. "Curse or blessing? multinational corporations and labor market outcomes in Africa," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 161(1), pages 339-371, February.
    • Handle: RePEc:spr:weltar:v:161:y:2025:i:1:d:10.1007_s10290-024-00547-3
    DOI: 10.1007/s10290-024-00547-3
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    More about this item

    Keywords

    Multinational enterprises; Labor supply; Job quality; Spatial analysis; Africa;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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