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Multinational enterprises, industrial relatedness and employment in European regions

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  • Nicola Cortinovis

    ()

  • Riccardo Crescenzi

    ()

  • Frank van Oort

    ()

Abstract

This paper looks at the link between Multinational Enterprises (MNEs) and employment in local firms in their host regions. The paper cross-fertilizes the literature on MNE spillovers with the emerging body of research on industrial relatedness. This paper empirically tests the link between industrial relatedness and MNE impacts on employment by capturing various types of horizontal and vertical similarities across industries. The focus of our study is on employment in European NUTS2 regions. The empirical analysis shows that cross-sectoral MNE spillovers among cognitively related industries are positive and significant, confirming that industrial relatedness is an important driver of employment-enhancing spillovers from MNE activities. However, positive effects of MNEs on domestic employment are contingent upon the modeling of both regional and industrial heterogeneity

Suggested Citation

  • Nicola Cortinovis & Riccardo Crescenzi & Frank van Oort, 2018. "Multinational enterprises, industrial relatedness and employment in European regions," Papers in Evolutionary Economic Geography (PEEG) 1802, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2018.
  • Handle: RePEc:egu:wpaper:1802
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    File URL: http://econ.geo.uu.nl/peeg/peeg1802.pdf
    File Function: Version Januari 2018
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    Keywords

    Foreign direct investment (FDI); relatedness; employment; Europe; regions;

    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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