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Multinationals as Stabilisers? Economic Crisis, Access to Finance, and Employment Growth

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  • Roberto Álvarez
  • Holger Görg

Abstract

This article examines the comparative response of multinationals and domestic firms to an economic crisis, using the empirical setting of a well defined case of economic slowdown in Chile. We find that employment in manufacturing plants has been drastically reduced during the economic crisis. Our findings reveal that multinationals are more likely to exit contributing to the employment contraction during the crisis, but surviving foreign firms experience lower employment reductions than domestic enterprises. These results are not fully consistent with the idea that multinationals are less affected by an economic crisis and that they may act as stabilisers.

Suggested Citation

  • Roberto Álvarez & Holger Görg, 2011. "Multinationals as Stabilisers? Economic Crisis, Access to Finance, and Employment Growth," Journal of Development Studies, Taylor & Francis Journals, vol. 48(7), pages 847-863, June.
  • Handle: RePEc:taf:jdevst:v:48:y:2012:i:7:p:847-863
    DOI: 10.1080/00220388.2011.621943
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    References listed on IDEAS

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    1. Girma, Sourafel & Gorg, Holger, 2007. "Evaluating the foreign ownership wage premium using a difference-in-differences matching approach," Journal of International Economics, Elsevier, vol. 72(1), pages 97-112, May.
    2. Flamm, Kenneth, 1984. "The volatility of offshore investment," Journal of Development Economics, Elsevier, vol. 16(3), pages 231-248, December.
    3. repec:idb:brikps:43518 is not listed on IDEAS
    4. Andrew B. Bernard & Fredrik Sjoholm, 2003. "Foreign Owners and Plant Survival," NBER Working Papers 10039, National Bureau of Economic Research, Inc.
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    Cited by:

    1. FERRAGINA, Anna Maria, 2013. "The Impact of FDI on Firm Survival and Employment: A Comparative Analysis for Turkey and Italy," CELPE Discussion Papers 127, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.

    More about this item

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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