Global Influences on Gender Inequality: Evidence from Female Employment in Korea

Do multinational enterprises (MNEs) from more gender-equal countries bring gender-equal employment practices with them or do they adopt the gender norms of a less gender-equal host country as part of their assimilation strategy? Using firm-level panel data for Korea, a country with low gender equality, we find suggestive evidence that MNEs from more gender-equal countries have higher female shares of employment and a higher likelihood of a female CEO of their Korean affiliate. Then, using difference-in-differences and nearest-neighbor matching techniques, we uncover causal evidence that MNEs bring their country of origin’s gender norms in employment with them. Firms that switch from Korean to foreign ownership report 2 to 12 percentage points higher female shares of permanent main-task workers at firm headquarters compared with firms that remain under domestic ownership. Lastly, we quantify that 1 to 7 percent of the increase in firm-level total factor productivity caused by foreign acquisition can be attributed to workforce reorganization that may reduce gender-based misallocations of talent.