Employment effects of foreign direct investment: New evidence from Central and Eastern European countries

Jude, Cristina; Silaghi, Monica Ioana Pop

doi:10.1016/j.inteco.2015.02.003

Cited by 84 publications

(65 citation statements)

References 24 publications

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“…Indeed, the literature illustrates that the time component plays a role for the effects of FDI on employment. There may occur transitory negative effects in the short run and positive effects in the long run (Jude & Silaghi, 2016). In particular for the long-run perspective, many studies suggest positive effects as, for example, unprofitable and least productive firms exit which allows for an efficient labour allocation (Helpman, Melitz, & Yeaple, 2004).…”

Section: Methodsmentioning

confidence: 99%

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The role of FDI in structural change: Evidence from Mexico

Escobar

Mühlen

2019

World Economy

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Foreign direct investment (FDI) flows to Mexico are substantial and play an important role in the Mexican economy since the mid‐1990s. These investments reflect the activities of multinational firms that shape to some extent the economic landscape and sectoral structure in this host country. We illustrate that there is considerable variation in the amounts of FDI and structural change within the country and across time. Based on this, the paper's main purpose is to analyse whether there is a significant impact of FDI on structural change. We conduct an empirical analysis covering the period 2006–16. We use the fixed‐effects estimator where the unit of observation is a Mexican state for which we calculate structural change from the reallocation of labour between sectors. The results suggest that (if any) there is a positive effect from FDI on growth‐enhancing structural change. This effect depends critically on the lag structure of FDI. Moreover, there is some evidence that the positive effect (a) arises from FDI flows in the industry sector and (b) is present for medium and low‐skilled labour reallocation.

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Section: Methodsmentioning

confidence: 99%

“…from FDI on employment (Hijzen, Martins, Schank, & Upward, 2013;Jude & Silaghi, 2016). Yet, it is unclear whether aggregated multinational activity in an economy has a significant effect on a labour reallocation across sectors.…”

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confidence: 99%

The role of FDI in structural change: Evidence from Mexico

Escobar

Mühlen

2019

World Economy

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“…It can cause competition in the host economy to increase by making domestic companies more efficient and it stimulates the diversification of sectors and products. Jude & Silaghi (2015) highlight in their paper that FDI on the short-run leads to the destruction of labor markets but can result in the creation of jobs on the long-run. Their research, however, was limited to EU countries, explaining that FDI as a determinant of employment is limited when compared to output growth and economic restructuring.…”

Section: Literature Reviewmentioning

confidence: 99%

Assessing a Causal Relationship Between Foreign Direct Investment and Human Capital: The Case of the Netherlands

Pinas¹,

Sun²,

Oppong-Baah³

et al. 2019

IBR

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Foreign direct investment is seen by many countries as an important source of capital. The flow of foreign direct investment in the world has been increasing over the past couple of years and many countries have adopted various institutional policies with the hope of attracting more foreign direct investment. Besides capital, these countries also get to benefit from the other advantages that these investments bring with them, such as the newest technology and managerial skills. FDI, besides boosting capital formation, also increases the quality of capital stock. Countries can only reap all the benefits of foreign direct investment if they have a sufficient amount of human capital. Human capital is seen by many researchers as one of the most important determinants of FDI. With the world becoming more knowledge-based and globalized the importance of human capital became very significant not only to individuals, but also to countries in their competitive advantages. The purpose of this research is to find out what the relationship is between foreign direct investment and human capital in the Netherlands. The Netherlands is a small country in Europe which has been a global leader in the inflow and outflow of FDI the past couple of years. This study uses the Augmented Dickey-Fuller test and the Johansen cointegration test to determine whether or not there is a causal relationship between the variable’s foreign direct investment and secondary school enrollment, which is used as a proxy for human capital. The study observed that there is no causal relationship between foreign direct investment and human capital in the Netherlands. The inflow of human capital into the Netherlands is determined by other factors.

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“…Con relación al efecto que la IED tiene en la generación de empleos, nuestros resultados coinciden con estudios similares en cuanto a la metodología empleada para la estimación del IED en el empleo en los países de Europa Central y Oriental (Jude y Pop, 2015;Onaran, 2008). Sin embargo, no se encontró evidencia consistente de que en las regiones la acumulación de IED sea un factor que influya en la generación de empleo manufacturero, los coeficientes de estimación son pequeños y no son significativos, lo que proporciona elementos para concluir que la IED no ha tenido los efectos esperados, al menos en la generación de empleo, sobre todo porque los resultados dejan ver que, después del PIB de la manufactura, hay un mayor peso relativo en los coeficientes estimados de la productividad laboral y de las exportaciones para algunas regiones, específicamente para la Centro Este.…”

Section: Conclusionesunclassified