IDEAS home Printed from https://ideas.repec.org/b/wfo/wstudy/34232.html
   My bibliography  Save this book

The Impact of Outward FDI in Central and Eastern Europe on Employment in the EU-15 Countries

Author

Listed:
  • Martin Falk

    (WIFO)

  • Yvonne Wolfmayr

Abstract

This paper examines the home market effects of outward FDI into the CEE region based on the AMADEUS firm-level database. In particular, we investigated the substitution possibilities between foreign affiliate employment and parent company employment by distinguishing between manufacturing and non-manufacturing in the period between 2000 and 2004. Despite fears of job losses in the home market due to outward FDI into the countries of central and Eastern Europe we find only limited evidence for the substitution of jobs between the parent companies in the EU-15 and their affiliates in the CEE countries. In particular we find that the strength of substitution is greater between employment in affiliates in high-wage countries and in the parent company than between affiliate employment in the CEE region and employment in the parent company.

Suggested Citation

  • Martin Falk & Yvonne Wolfmayr, 2008. "The Impact of Outward FDI in Central and Eastern Europe on Employment in the EU-15 Countries," WIFO Studies, WIFO, number 34232, August.
    • Handle: RePEc:wfo:wstudy:34232
    as

    Download full text from publisher

    File URL: https://www.wifo.ac.at/wwa/pubid/34232
    File Function: abstract
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ludo Cuyvers & Michel Dumont & Glenn Rayp & Katrien Stevens, 2005. "Home Employment Effects of EU Firms’ Activities in Central and Eastern European Countries," Open Economies Review, Springer, vol. 16(2), pages 153-174, April.
    2. Marin, Dalia, 2004. "‘A Nation of Poets and Thinkers’ - Less So with Eastern Enlargement? Austria and Germany," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 77, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    3. Sascha O. Becker & Karolina Ekholm & Robert Jäckle & Marc-Andreas Muendler, 2005. "Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(4), pages 693-731, December.
    4. Michael Pfaffermayr, 2001. "Employment in domestic plants and foreign affiliates: A note on the elasticity of substitution," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 137(2), pages 347-364, June.
    5. Jozef Konings & Alan Patrick Murphy, 2006. "Do Multinational Enterprises Relocate Employment to Low-Wage Regions? Evidence from European Multinationals," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(2), pages 267-286, July.
    6. Giorgio Barba Navaretti & Davide Castellani, 2003. "Investments Abroad and Performance at Home Evidence from Italian Multinationals," Development Working Papers 180, Centro Studi Luca d'Agliano, University of Milano.
    7. Marin, Dalia, 2004. "'A Nation of Poets and Thinkers' - Less So with Eastern Enlargement? Austria and Germany," Discussion Papers in Economics 329, University of Munich, Department of Economics.
    8. Margit Molnar & Nigel Pain & Daria Taglioni, 2007. "The Internationalisation of Production, International Outsourcing and Employment in the OECD," OECD Economics Department Working Papers 561, OECD Publishing.
    9. Anna Maria Falzoni & Mara Grasseni, 2005. "Home Country Effects of Investing Abroad: Evidence from Quantile Regressions," KITeS Working Papers 170, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jun 2005.
    10. Mihir A. Desai & C. Fritz Foley & James R. Hines Jr., 2005. "Foreign Direct Investment and Domestic Economic Activity," NBER Working Papers 11717, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Catherine Laffineur & El Mouhoud, 2015. "The jobs at risk from globalization: the French case," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(3), pages 477-531, August.
    2. Doris Ritzberger-Grünwald & Alfred Stiglbauer & Walter Waschiczek, 2016. "Banking employment in Austria," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 32, pages 80-100.
    3. Fritz Breuss, 2012. "EU-Mitgliedschaft Österreichs. Eine Evaluierung in Zeiten der Krise," WIFO Studies, WIFO, number 45578, August.
    4. Damijan, Jože & Kostevc, Crt & Rojec, Matija, 2014. "Outward FDI and company performance in CEECs," Working Paper Series in Economics and Institutions of Innovation 381, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:wsr:ecbook:2008:i:i-016 is not listed on IDEAS
    2. Cesare Imbriani & Rosanna Pittiglio & Filippo Reganati, 2014. "Affiliates and parent employment through foreign direct investment: a study case of substitutability or complementarity," International Economics and Economic Policy, Springer, vol. 11(4), pages 619-638, December.
    3. Marc-Andreas Muendler & Sascha O. Becker, 2010. "Margins of Multinational Labor Substitution," American Economic Review, American Economic Association, vol. 100(5), pages 1999-2030, December.
    4. Özlem Onaran, 2012. "The Effect of Foreign Affiliate Employment on Wages, Employment, and the Wage Share in Austria," Review of Political Economy, Taylor & Francis Journals, vol. 24(2), pages 251-271, April.
    5. Driffield, Nigel & Pereira, Vijay & Temouri, Yama, 2019. "Does offshore outsourcing impact home employment? Evidence from service multinationals," Journal of Business Research, Elsevier, vol. 103(C), pages 448-459.
    6. Martin Falk & Yvonne Wolfmayr, 2010. "The substitutability between parent company and foreign affiliate employment in Europe," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(1), pages 87-100, February.
    7. Sascha O. Becker & Karolina Ekholm & Robert Jäckle & Marc-Andreas Muendler, 2005. "Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(4), pages 693-731, December.
    8. Cesare Imbriani & Rosanna Pittiglio & Filippo Reganati, 2011. "Outward Foreign Direct Investment and Domestic Performance: the Italian Manufacturing and Services Sectors," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 39(4), pages 369-381, December.
    9. Jäckle Robert & Wamser Georg, 2010. "Going Multinational: What are the Effects on Home-Market Performance?," German Economic Review, De Gruyter, vol. 11(2), pages 188-207, May.
    10. Yamashita, Nobuaki & Fukao, Kyoji, 2010. "Expansion abroad and jobs at home: Evidence from Japanese multinational enterprises," Japan and the World Economy, Elsevier, vol. 22(2), pages 88-97, March.
    11. Riccardo Crescenzi & Roberto Ganau & Michael Storper, 2022. "Does foreign investment hurt job creation at home? The geography of outward FDI and employment in the USA," Journal of Economic Geography, Oxford University Press, vol. 22(1), pages 53-79.
    12. Liu, Wan-Hsin & Nunnenkamp, Peter, 2011. "Domestic Repercussions of Different Types of FDI: Firm-Level Evidence for Taiwanese Manufacturing," World Development, Elsevier, vol. 39(5), pages 808-823, May.
    13. Marcus Neureiter & Peter Nunnenkamp, 2010. "Outsourcing Motives, Location Choice and Labour Market Implications: An Empirical Analysis for European Countries," Kyklos, Wiley Blackwell, vol. 63(2), pages 206-230, May.
    14. 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).
    15. repec:bla:germec:v:11:y:2010:i::p:188-207 is not listed on IDEAS
    16. Friebel, Guido & Heinz, Matthias, 2014. "Media slant against foreign owners: Downsizing," Journal of Public Economics, Elsevier, vol. 120(C), pages 97-106.
    17. Hübler, Michael, 2007. "A simple model of outsourcing with Cournot competition," Kiel Working Papers 1320, Kiel Institute for the World Economy (IfW Kiel).
    18. Stefano Federico & Gaetano Alfredo Minerva, 2008. "Outward FDI and Local Employment Growth in Italy," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(2), pages 295-324, July.
    19. Claudia M. Buch & Jörn Kleinert, 2006. "Who Goes East? The Impact of Enlargement on the Patterns of German FDI," IAW Discussion Papers 24, Institut für Angewandte Wirtschaftsforschung (IAW).
    20. Giorgio Barba Navaretti & Davide Castellani & Anne-Celia Disdier, 2006. "How Does Investing in Cheap Labour Countries Affect Performance at Home? France and Italy," Development Working Papers 215, Centro Studi Luca d'Agliano, University of Milano.
    21. Joel Stiebale & Michaela Trax, 2010. "The Eff ects of Cross-border M&As on the Acquirers’ Domestic Performance – Firm-level Evidence," Ruhr Economic Papers 0159, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    22. Joel Stiebale & Michaela Trax, 2011. "The effects of cross-border M&As on the acquirers' domestic performance: firm-level evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 44(3), pages 957-990, August.

    More about this item

    Keywords

    FIW Foreign direct investment;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wfo:wstudy:34232. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Florian Mayr (email available below). General contact details of provider: https://edirc.repec.org/data/wifooat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.