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Title:The effect of FDI on job separation PDF Logo
Authors:Becker, Sascha O.
Muendler, Marc-Andreas
Issue Date:2006
Series/Report no.:CESifo working paper 1864
Abstract:A novel linked employer-employee data set documents that expanding multinational enterprises retain more domestic jobs than competitors without foreign expansions. In contrast to prior research, a propensity score estimator allows enterprise performance to vary with foreign direct investment (FDI) and shows that the foreign expansion itself is the dominant explanatory factor for reduced worker separation rates. Bounding, concomitant variable tests, and robustness checks rule out competing hypotheses. The finding is consistent with the idea that, given global factor price differences, a prevention of enterprises from outward FDI would lead to more domestic worker separations. FDI raises domestic-worker retention more pronouncedly among highly educated workers and for expansions into distant locations.
JEL:F21
F23
J23
J63
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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