Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19678
Authors: 
Muendler, Marc-Andreas
Becker, Sascha O.
Year of Publication: 
2007
Series/Report no.: 
Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2007,01
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.
Subjects: 
Multinational enterprises
international investment
demand for labor
worker layoffs
linked employer-employee data
JEL: 
F21
F23
J63
J23
Document Type: 
Working Paper

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