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Determinants of Employment Growth at MNEs: Evidence from Egypt, India, South Africa and Vietnam

Author

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  • Bhaumik, Sumon K.

    () (University of Sheffield)

  • Estrin, Saul

    () (London School of Economics)

  • Meyer, Klaus

    () (Copenhagen Business School)

Abstract

Foreign investors are expected to contribute to economic development through a variety of channels. However, many foreign investment operations are small, and almost insignificant in their impact on the local environment. An important indication of the potential contribution of foreign investors is thus their employment growth. Employees working for, and trained by, a multinational enterprise may become carriers of new technology and business practices. The more employees receive access to new knowledge, the more they in turn may spread the knowledge across the economy, for instance by setting up their own businesses. In this paper, we make a first step in investigating the determinants of this important mediating variable, employment growth. For a dataset covering four diverse emerging economies, we find that wholly-owned FDI operations have higher employment growth, while local industry characteristics moderate the growth effect.

Suggested Citation

  • Bhaumik, Sumon K. & Estrin, Saul & Meyer, Klaus, 2004. "Determinants of Employment Growth at MNEs: Evidence from Egypt, India, South Africa and Vietnam," IZA Discussion Papers 1272, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1272
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    References listed on IDEAS

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    Cited by:

    1. Mickiewicz, Tomasz & Gerry, Christopher J. & Bishop, Kate, 2005. "Privatisation, corporate control and employment growth: Evidence from a panel of large Polish firms, 1996-2002," Economic Systems, Elsevier, vol. 29(1), pages 98-119, March.
    2. Nassar, Heba., 2011. "Growth, employment policies and economic linkages : Egypt," ILO Working Papers 994652793402676, International Labour Organization.
    3. Sergio Alessandrini, 2014. "Employment creation through inward FDI in the EMFTA and employment linkages within sectors," Chapters,in: The Economic and Political Aftermath of the Arab Spring, chapter 3, pages 79-105 Edward Elgar Publishing.
    4. Anh Nguyen Ngoc & Nhat Nguyen Duc & Chuc Nguyen Dinh, 2011. "The Impact of the Economic Stimulus on Domestic, Private Enterprises," Working Papers 06, Development and Policies Research Center (DEPOCEN), Vietnam.
    5. repec:ilo:ilowps:455342 is not listed on IDEAS
    6. Villa, Stefania., 2010. "Exploring the linkages between investment and employment in Moldova : a time-series analysis," ILO Working Papers 994553423402676, International Labour Organization.
    7. repec:ilo:ilowps:465279 is not listed on IDEAS

    More about this item

    Keywords

    FDI policy; control; employment growth; MNE; institutions;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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