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Curse or Blessing? Multinational Corporations and Labor Supply in Africa

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  • Prarolo, Giovanni
  • Mendola, Mariapia
  • Sonno, Tommaso

Abstract

Do multinational enterprises create local job opportunities in developing countries? We address this largely unanswered question by combining geolocalised individual-level data with information on domestic and foreign multinationals' affiliates in Sub-Saharan Africa over more than a decade. Having a multinational's affiliate within walking distance correlates with an increase in employment of +4.3% 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.

Suggested Citation

  • Prarolo, Giovanni & Mendola, Mariapia & Sonno, Tommaso, 2022. "Curse or Blessing? Multinational Corporations and Labor Supply in Africa," CEPR Discussion Papers 16964, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16964
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    More about this item

    Keywords

    Multinational enterprises; Labor supply; Job quality; 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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