Employment Effects of Foreign Direct Investment. New Evidence from Central and Eastern European Countries

Jude, Cristina; Silaghi, Monica Ioana Pop

doi:10.2139/ssrn.2607520

Cited by 19 publications

(4 citation statements)

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“…Though the impressive growth experienced in many of the SSA countries has been largely influenced by structural policies with macroeconomic adjustments, there are concerns over the effectiveness of such policies in ensuring more productive employment yields (Jude & Silaghi, 2016; Kamar et al, 2019). This is because, while these policies ensure consistent output expansion, they may be weak in enhancing distributional equity, sectoral interlinkages or productivity shifts in the necessary sectors that are expected to result in productive employment.…”

Section: Introductionmentioning

confidence: 99%

Macroeconomic policies and sustainable employment yields in sub‐Saharan Africa

Adegboye

2020

African Development Review

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The impact of macroeconomic policies on employment yields from output growth in sub-Saharan African countries is examined in this study. Data for 37 countries are used for the period 1991-2016 and sustainable employment yields are obtained by comparing employment elasticities for own-account (vulnerable) and employers (formal) groups. The two-stage least squares method is used to estimate employment elasticities for the panel datasets for three sub-periods (1991-1999, 2000-2009, 2010-2016), and the feasible generalised least squares method is used to estimate the effects of policies on employment elasticities based on a pooled dataset for the three sub-periods. Policy efforts are shown to be more effective if moved towards more flexible and targeted tax regimes, more rigid labour markets, and liberalised trade. On the other hand, investment and industrial policies do not appear to exert unidirectional effects on employment, especially given wide variations in government sizes and relative shares of domestic/foreign investment among the countries. There is also evidence that policy influences are more practicable with more formal employment groups. Patterns of macroeconomic policy directions are therefore critical to their effectiveness as labour market adjustment tools in the region.

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Section: Introductionmentioning

confidence: 99%

Macroeconomic policies and sustainable employment yields in sub‐Saharan Africa

Adegboye

2020

African Development Review

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“…322-335). In the study by Jude and Silaghi (2015), it has been shown that the main determinant of employment dynamics in Central and Eastern European countries was the economic restructuring and the institutional change that accompanied progress in transition with traditional labor determinants, like output and wages, proved to be less important for different patterns of ownership.…”

Section: Discussionmentioning

confidence: 99%

“…At the same time, Jude and Silaghi (2015) suggest that there is a gap in the studies of the FDI effects on the employment indicators since major studies focus on productivity and wages (Aitken & Harrison, 1999, pp. 605-618;Girma et al, 2002, pp.…”

Section: Introductionmentioning

confidence: 99%

Labor indicators and manufacturing companies ownership patterns in Russia and its regions: results of quantitative analysis

Spitsin

Михальчук

Pavlova

et al. 2018

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Research background: There has been an extensive process of foreign and joint ownership enterprises establishment in the Russian economy since 2006. Domestic manufacturing industry has been experiencing certain pressure on behalf of foreign direct investment bringing new technologies and higher labor requirements. Purpose of the article: The aim of this paper is to investigate differences in employment strategies and labor indicators in the case of enterprises in foreign and joint ownership (FJO) and domestic enterprises in Russian ownership (RO). We analyze the manufacturing industry in Russia and its regions under conditions of stable and crisis periods. Methods: The study enhances the analysis of Rosstat’s statistical data for 2005–2016 and applies ANOVA method to compare the employment results for companies with different ownership patterns. The research is carried out both at the national level of the Russian Federation and at the regional level according to the regions. Findings & Value added: The study identifies significant decline in employment and in-crease in productivity for the period of 2005–2016. In contrast to the crisis of 2008–2009, in 2014–2016 there has been no sharp drop in employment. However, there is a substantial decline in real salaries which is comparable to the crisis of 2008-2009. According to ANOVA, statistically significant differences in labor indicators between FJO and RO companies are manifested. RO companies dominate in employment and payroll funds, while FJO enter-prises have better productivity results with a higher average salary. FJO companies demonstrated faster growth in employment and payroll fund in relatively stable conditions (2012–2013). However, they reacted with a significant reduction in employment for a new crisis (2014–2016), although the creation of new FJO enterprises continued in separate regions of Russia. The results can be used in social policy to regulate the employment and earnings of industrial workers in the current economic conditions.

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“…However, the evidence is more mixed for higher-income countries. Although manufacturing FDI in Sweden was associated with an increase in employment (Bandick and Karpaty 2011), FDI in central and eastern Europe led to job losses through competitive pressure and introduction of labor-saving technology (Jude and Silaghi 2015). For higher-income countries, FDI may decrease the number of jobs in the short term by introducing labor-saving technology, but it will likely increase job growth in the long term by enhancing labor productivity .…”

Section: Figure 33 Conceptual Framework: Fdi Has Varied Effects On Labor Market Outcomesmentioning

confidence: 99%

Global Investment Competitiveness Report 2019/2020: Rebuilding Investor Confidence in Times of Uncertainty

2020

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This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

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Employment Effects of Foreign Direct Investment. New Evidence from Central and Eastern European Countries

Abstract: Tel: +33 (0)1 42 97 77 35, Fax: +33 (0)1 42 92 47 47. The views expressed herein are solely those of the authors and do not necessarily reflect those of Banque de France. Corresponding Author

Cited by 19 publications

References 34 publications

Macroeconomic policies and sustainable employment yields in sub‐Saharan Africa

Macroeconomic policies and sustainable employment yields in sub‐Saharan Africa

Labor indicators and manufacturing companies ownership patterns in Russia and its regions: results of quantitative analysis

Global Investment Competitiveness Report 2019/2020: Rebuilding Investor Confidence in Times of Uncertainty

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