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Title:FDI in Mexico: An empirical assessment of employment effects PDF Logo
Authors:Nunnenkamp, Peter
Bremont, José Eduardo Alatorre
Issue Date:2007
Series/Report no.:Kieler Arbeitspapiere 1328
Abstract:We raise the question whether foreign direct investment (FDI) has contributed to employment generation in Mexico and, thereby, helped overcome the country's pressing labor market problems. The analysis draws on highly disaggregated FDI and employment data covering almost 200 manufacturing industries. We estimate dynamic labor demand functions for blue and white collar workers, including both FDI and its interaction with major industry characteristics. By employing the GMM estimator suggested by Arellano and Bond, we account for the relatively short time dimension of our panel (1994-2006). It turns out that FDI has a significantly positive, though quantitatively modest impact on manufacturing employment in Mexico. Moreover, we find no evidence supporting the widely held view that FDI adds to white collar employment in the first place. However, the positive effect on blue collar employment diminishes with increasing skill intensity of manufacturing industries.
Subjects:Foreign direct investment
Employment
Blue and white collar workers
Manufacturing sector
Mexico
JEL:F23
J23
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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