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Women in Transition: The Dynamic Effects of Inward FDI on Female Employment in the Economy and Across Sectors

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  • Pascal L. Ghazalian

    (Department of Economics, University of Lethbridge, Lethbridge, AB T1K 3M4, Canada)

Abstract

This paper examines the effects of inward Foreign Direct Investment (FDI) on the female employment rate in the economy and the share of female employment across sectors. The empirical analysis is implemented through the Generalized Method of Moments (GMM) System estimator for dynamic panel models using different empirical specifications and FDI openness indicators. The main results show that the overall effects of inward FDI on the national female employment rate are not statistically significant. However, they reveal that inward FDI has promoted the share of female employment in the service sector and has led to decreases in the share of female employment in agriculture. The FDI effects on the share of female employment in the industrial sector are found to be statistically insignificant. These results are generally supported when running the empirical analysis through alternative FDI openness indicators. Also, supplementary analysis reveals some variations in the magnitude of these effects over different national income categories. The findings in this paper emphasize FDI’s gendered influences in the labour market. They are consistent with the prevalence of macroeconomic channels through which inward FDI impacts female employment across sectors, and they encompass the underlying implications of various counteracting microeconomic factors.

Suggested Citation

  • Pascal L. Ghazalian, 2024. "Women in Transition: The Dynamic Effects of Inward FDI on Female Employment in the Economy and Across Sectors," Economies, MDPI, vol. 12(12), pages 1-22, November.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:12:p:318-:d:1528393
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    References listed on IDEAS

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    1. Brian Aitken & Ann Harrison & Robert E. Lipsey, 2022. "Wages and foreign ownership A comparative study of Mexico, Venezuela, and the United States," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 4, pages 61-87, World Scientific Publishing Co. Pte. Ltd..
    2. Bruce A. Blonigen & Jeremy Piger, 2019. "Determinants of Foreign Direct Investment," World Scientific Book Chapters, in: Foreign Direct Investment, chapter 1, pages 3-54, World Scientific Publishing Co. Pte. Ltd..
    3. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    4. Gray, Mark M. & Kittilson, Miki Caul & Sandholtz, Wayne, 2006. "Women and Globalization: A Study of 180 Countries, 1975–2000," International Organization, Cambridge University Press, vol. 60(2), pages 293-333, April.
    5. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
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