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Foreign direct investment and search unemployment : Theory and evidence

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  • Schmerer, Hans-Jörg

    ()

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

Abstract

"This paper proposes a simple multi-industry trade model with search frictions in the labor market. Unimpeded access to global financial markets enables capital owners to invest abroad, thereby fostering unemployment at the extensive industry margin. Whether a country benefits from FDI in terms of unemployment depends on the respective country's net-FDI, measured as the difference between in- and outward FDI. The derived FDI and unemployment nexus is tested employing macroeconomic data for 19 OECD countries on unemployment, FDI, and labor market institutions. Results support the model in that net-FDI is robustly associated with lower rates of aggregate unemployment." (Author's abstract, IAB-Doku) ((en))

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Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 201204.

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Length: 32 pages
Date of creation: 01 Mar 2012
Date of revision:
Publication status: published in: International Review of Economics and Finance, Vol. 30, No. March (2014), p. 41-56
Handle: RePEc:iab:iabdpa:201204
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Keywords: Auslandsinvestitionen; Beschäftigungseffekte - internationaler Vergleich; Sucharbeitslosigkeit; Außenhandel; institutionelle Faktoren; Arbeitsmarktpolitik; friktionelle Arbeitslosigkeit; Wirtschaftszweige; Arbeitslosenquote; Arbeitskräftenachfrage; OECD;

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Find related papers by JEL classification:
  • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
  • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
  • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
  • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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Cited by:

  1. Friedrich Poeschel, 2013. "Assortative matching through signals," 2013 Papers ppo178, Job Market Papers.
  2. Kröll, Alexandra & Farhauer, Oliver, 2012. "Examining the roots of homelessness: The impact of regional housing market conditions and the social environment on homelessness in North Rhine-Westphalia, Germany," IAB Discussion Paper 201213, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  3. Münich, Daniel & Srholec, Martin & Moritz, Michael & Schäffler, Johannes, 2012. "Mothers and Daughters: Heterogeneity of German direct investments in the Czech Republic. Evidence from the IAB-ReLOC survey," IAB Discussion Paper 201217, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  4. Deeke, Axel & Baas, Meike, 2012. "Berufliche Statusmobilität von Arbeitslosen nach beruflicher Weiterbildung : ein empirischer Beitrag zur Evaluation der Förderung beruflicher Weiterbildung," IAB Discussion Paper 201211, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Schmerer, Hans-Jörg, 2012. "FDI, skill-specific unemployment, and institutional spillover effects," Economics Discussion Papers 2012-2, Kiel Institute for the World Economy.
  6. Dauth, Wolfgang & Findeisen, Sebastian & Suedekum, Jens, 2013. "The rise of the East and the Far East: German labor markets and trade integration," DICE Discussion Papers 127, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  7. Drasch, Katrin, 2012. "Between familial imprinting and institutional regulation: Family related employment interruptions of women in Germany before and after the German reunification," IAB Discussion Paper 201209, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  8. Schmerer, Hans-Jörg, 2012. "Skill-biased labor market reforms and international competitiveness," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 6, pages 1-39.
  9. Erdogan, Ayse M., 2014. "Bilateral trade and the environment: A general equilibrium model based on new trade theory," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 52-71.
  10. Mendolicchio, Concetta & Paolini, Dimitri & Pietra, Tito, 2012. "Asymmetric information and overeducation," IAB Discussion Paper 201214, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  11. Engelmann, Sabine, 2012. "International trade, technical change and wage inequality in the U.K. economy," IAB Discussion Paper 201208, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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