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Foreign Direct Investment, Employment and Wages in Sub‐Saharan Africa

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  • Nicola D. Coniglio
  • Francesco Prota
  • Adnan Seric

Abstract

Job creation is one of the main challenges for developing countries. The aim of this paper is to analyse the relation between foreign ownership and employment using an original firm‐level dataset that covers 19 sub‐Saharan African countries. Our results show that although foreign firms are generally larger than local ones, the employment they generate is relatively more unskilled labour intensive compared with that generated by domestic firms. We discover substantial differences between foreign investors from the north and the south, in terms of both skill intensity and wage premiums. We also find that, ceteris paribus, Chinese firms employ more workers (mostly blue‐collar workers) and pay lower wages for both skilled and unskilled workers compared with both domestic firms and other foreign investors. Copyright © 2014 John Wiley & Sons, Ltd.

Suggested Citation

  • Nicola D. Coniglio & Francesco Prota & Adnan Seric, 2015. "Foreign Direct Investment, Employment and Wages in Sub‐Saharan Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 27(7), pages 1243-1266, October.
  • Handle: RePEc:wly:jintdv:v:27:y:2015:i:7:p:1243-1266
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    Cited by:

    1. Sanjaya Kumar Malik, 2019. "Foreign Direct Investment and Employment in Indian Manufacturing Industries," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(4), pages 621-637, December.
    2. Thomas Habanabakize & Daniel Francois Meyer & Judit Oláh, 2019. "The Impact of Productivity, Investment and Real Wages on Employment Absorption Rate in South Africa," Social Sciences, MDPI, Open Access Journal, vol. 8(12), pages 1-15, December.
    3. Moran, Theodore H. & Görg, Holger & Seric, Adnan, 2016. "Quality FDI and Supply-Chains in Manufacturing: Overcoming Obstacles and Supporting Development," KCG Policy Papers 1, Kiel Centre for Globalization (KCG).
    4. Sotiris Blanas & Adnan Seric & Christian Viegelahn, 2017. "Jobs, FDI and Institutions in Sub-Saharan Africa: Evidence from Firm-Level Data," Working Papers 152465485, Lancaster University Management School, Economics Department.
    5. Sotiris Blanas & Adnan Seric & Christian Viegelahn, 2019. "Job Quality, FDI and Institutions in Sub-Saharan Africa: Evidence from Firm-Level Data," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(5), pages 1287-1317, December.
    6. Nicola D. Coniglio & Rezart Hoxhaj & Adnan Seric, 2017. "The demand for foreign workers by foreign firms: evidence from Africa," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(2), pages 353-384, May.

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