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Outbound Foreign Direct Investment (FDI) Motivation and Domestic Employment by Multinational Enterprises (MNEs)

Author

Listed:
  • Hong, Eunsuk
  • Lee, In Hyeock (Ian)
  • Makino, Shige

Abstract

This study investigates whether and how outbound foreign direct investment (FDI) boosts or reduces domestic employment by multinational enterprises (MNEs). Based on analyses of a firm-level sample of 18,252 subsidiary-year cases of Japanese MNEs in 59 countries from 1996 to 2010, the findings indicate that outbound FDI motivated by (1) market seeking for scale and scope expansion, (2) natural resource seeking, or (3) strategic asset seeking tends to serve as a “strategic complement” that enhances domestic employment by MNEs. However, outbound FDI motivated by (4) market seeking associated with declines in domestic demand or (5) labor resource seeking tends to act as a “strategic substitute” that reduces domestic employment by MNEs. The implications for theory, practice, and policymaking are discussed.

Suggested Citation

  • Hong, Eunsuk & Lee, In Hyeock (Ian) & Makino, Shige, 2019. "Outbound Foreign Direct Investment (FDI) Motivation and Domestic Employment by Multinational Enterprises (MNEs)," Journal of International Management, Elsevier, vol. 25(2), pages 1-1.
    • Handle: RePEc:eee:intman:v:25:y:2019:i:2:1
    DOI: 10.1016/j.intman.2018.11.003
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    Citations

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    Cited by:

    1. Allen, Matthew M.C. & Demirbag, Mehmet & Allen, Maria L. & Bhankaraully, Shabneez & Wood, Geoff, 2024. "Multinational enterprises' R&D commitments in Chinese provinces: A configurational approach," Journal of International Management, Elsevier, vol. 30(4).
    2. Lee, Hyoungjin & Chung, Chris Changwha, 2022. "Go small or go home: Operational exposure to violent conflicts and foreign subsidiary exit," Journal of World Business, Elsevier, vol. 57(6).
    3. Yijia Song & Ruichen Deng & Ruoxi Liu & Qian Peng, 2020. "Effects of Special Economic Zones on FDI in Emerging Economies: Does Institutional Quality Matter?," Sustainability, MDPI, vol. 12(20), pages 1-21, October.
    4. Hideaki Sakawa & Naoki Watanabel & Junjian Gu, 2021. "The Internationalization and Voluntary Adoption of International Accounting Standards by Japanese MNEs," Management International Review, Springer, vol. 61(5), pages 713-744, October.
    5. Lee, In Hyeock (Ian) & Hong, Eunsuk & Makino, Shige, 2020. "The effect of non-conventional outbound foreign direct investment (FDI) on the domestic employment of multinational enterprises (MNEs)," International Business Review, Elsevier, vol. 29(3).
    6. Niranjan Chipalkatti & Quan Vu Le & Meenakshi Rishi, 2021. "Sustainability and Society: Do Environmental, Social, and Governance Factors Matter for Foreign Direct Investment?," Energies, MDPI, vol. 14(19), pages 1-18, September.

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