Résumé
This paper provides new evidence on the impact of foreign direct investment on the labour market of home countries. It is based on a new data set on change rates of foreign direct investment and domestic employment of German multinationals. The econometric analysis suggests that public concerns about a massive exodus of jobs to low-wage countries are not well-founded. Instead, parent firm's employment significantly increases with an increase of their FDI. All in all, our results provide strong evidence against traditional trade theory, which predicts a negative relationship between foreign and domestic employment, and weakly support the theory of the multinational firm.
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Extrait
Home Market Effects of Foreign Direct Investment: The Case of Germany
1 Introduction
How does foreign direct investment (FDI) affect employment in home countries? Many observers are concerned that the relocation of jobs to low-wage countries will erode industrial employment opportunities in highly developed countries. It is the basic message of this paper that such concerns are empirically not well-founded.Section 2 of the paper briefly discusses the concepts of vertical and horizontal foreign FDI in international trade theory. It elabourates the different implications of these two concepts for the regional and sectoral structure of FDI and for domestic employment. Section 3 confronts these predictions with the actual patterns of German outward FDI. Section 4 analyses newly available micro-data which allow to compile information on the change rate of domestic employment of German multinational firms and to regress this variable on r...Voir le contenu complet de ce document
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