Determinants of employment growth at MNEs: evidence from Egypt, India, South Africa and Vietnam

Sumon Bhaumik, Saul Estrin, Klaus E. Meyer

Research output: Contribution to journalArticle

Abstract

Many foreign investment operations into emerging markets are small, and are likely to have only a limited impact on the local economy. However, host governments often expect transfer of advanced technology from multinational enterprises (MNEs) operating in these markets to local firms by way of inter-firm mobility of skilled labourers. The extent of such transfers would be limited, among other factors, by the size of the pool of skilled labourers that can potentially be mobile between MNEs and local firms. This, in turn, is determined by employment growth at the MNEs. We develop an empirical specification that models this employment growth, by drawing on both the economics and international business literature. This model is then estimated using firm-level data from four emerging markets. We find that wholly owned foreign direct investment operations have higher employment growth, while local industry and institutional characteristics moderate the growth effect. This suggests that policies encouraging foreign investors to set up in form of joint ventures may not actually raise the benefits for the host economy.
Original languageEnglish
Pages (from-to)61-80
Number of pages20
JournalComparative Economic Studies
Volume49
Issue number1
DOIs
Publication statusPublished - Mar 2007

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Employment growth
South Africa
India
Egypt
Multinational enterprises
Emerging markets
Joint ventures
Local economy
International business
Government
Factors
Institutional characteristics
Foreign investors
Firm-level data
Economics
Model specification
Industry characteristics
Foreign direct investment
Foreign investment

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Bhaumik, Sumon ; Estrin, Saul ; Meyer, Klaus E. / Determinants of employment growth at MNEs : evidence from Egypt, India, South Africa and Vietnam. In: Comparative Economic Studies. 2007 ; Vol. 49, No. 1. pp. 61-80.
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Determinants of employment growth at MNEs : evidence from Egypt, India, South Africa and Vietnam. / Bhaumik, Sumon; Estrin, Saul; Meyer, Klaus E.

In: Comparative Economic Studies, Vol. 49, No. 1, 03.2007, p. 61-80.

Research output: Contribution to journalArticle

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