Does It Matter Where You Invest? The Impact of FDI on Domestic Job Creation and Destruction

Ni, Bin; Kato, Hayato; Liu, Yang

Discussion Papers In Economics And Business, 2021, 20-18, 1-10

Number of Access:493（2025-09-04 08:32 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/78354

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Title
Does It Matter Where You Invest? The Impact of FDI on Domestic Job Creation and Destruction
Creator
NRID
1000060779677 1000060779677
CreatorName
Ni, Bin
NRID
1000030837703 1000030837703
ORCID
0000-0002-2063-8453 0000-0002-2063-8453
researchmap permalink
30837703 30837703
Scopus Author ID
57200115385 57200115385
CreatorName
Kato, Hayato
NRID
1000050635084 1000050635084
CreatorName
Liu, Yang
Subject
Outward FDI
firm-establishment-division-level data
multinational enterprises (MNEs)
large-firm search model
high/low-skilled jobs
Abstract
This study uses unique division-level data of Japanese firms to examine how foreign direct investment (FDI) affects domestic employment. Contrary to most previous studies focusing on the effect on net employment growth, we decompose it into gross job creation and gross job destruction. We find that FDI destination plays an important role: FDI to Asia increases job creation, while FDI to Europe or North America decreases it. A frictional search-and-matching model with heterogeneous jobs can explain the differential effects. The model provides additional predictions on job creation and destruction by job type, which are also empirically confirmed.
Publisher
Graduate School of Economics, Osaka University
Source Title
Discussion Papers In Economics And Business
Volume (Issue)
20-18
Page
1-10
Date of Issued
2021-01
Language
English
Handle URL
https://hdl.handle.net/11094/78354
NCID
AA1160366X
Relation.references
URI
http://www2.econ.osaka-u.ac.jp/econ_society/dp/2018.pdf
Access Rights
metadata only access
Category
ディスカッション／ワーキング・ペーパー DP/WP
Discussion Papers In Economics And Business