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The Effects of FDI on Domestic Employment and Workforce Composition

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  • TANAKA Ayumu

Abstract

This study uses propensity score matching techniques to examine the effects on domestic employment of Japanese manufacturing, wholesale, and service sector firms that initiated foreign direct investment (FDI) during 2003-2005. Results reveal that, in all three sectors, employment growth was higher among firms that initiated FDI than those that remained exclusively domestic. Moreover, manufacturing firms experienced higher growth in the share of non-regular workers. In addition, empirical results indicate that FDI's positive employment effects were accompanied by positive impacts on overall sales and/or exports. Positive impacts on export sales in manufacturing and wholesale sectors and on overall sales in manufacturing and services sectors were found.

Suggested Citation

  • TANAKA Ayumu, 2012. "The Effects of FDI on Domestic Employment and Workforce Composition," Discussion papers 12069, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:12069
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    File URL: https://www.rieti.go.jp/jp/publications/dp/12e069.pdf
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    Cited by:

    1. Mitsoyo Ando & Fukunari Kimura, 2015. "Globalization and Domestic Operations: Applying the JC/JD Method to Japanese Manufacturing Firms," Asian Economic Papers, MIT Press, vol. 14(2), pages 1-35, Summer.
    2. ITO Keiko & TANAKA Ayumu, 2014. "The Impact of Multinationals' Overseas Expansion on Employment at Suppliers at Home: New evidence from firm-level transaction relationship data for Japan," Discussion papers 14011, Research Institute of Economy, Trade and Industry (RIETI).
    3. Altuzarra, Amaia & Bustillo, Ricardo & Rodríguez, Carlos, 2018. "Much ado about nothing: No fear of becoming a multinational," International Business Review, Elsevier, vol. 27(1), pages 56-65.
    4. LIU Yang & NI Bin, 2018. "Outward Foreign direct investment and Firm-level Employment Dynamics in Japanese Manufacturing Firms," Discussion papers 18069, Research Institute of Economy, Trade and Industry (RIETI).
    5. Chin Hee Hahn & Yong-Seok Choi & Sadayuki Takii & Dionisius Narjoko & Rafaelita M. Aldaba & Shandre M. Thangavelu & Archanun Kohpaiboon & Juthathip Jongwanich & Alfons Palangkaraya & Cassey Lee & Keik, . "Impact of Globalization on Labor Market," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2012-rpr-04 edited by Chine Hee HAHN & Dionisius Narjoko, October.
    6. Tanaka, Ayumu, 2013. "The causal effects of exporting on domestic workers: A firm-level analysis using Japanese data," Japan and the World Economy, Elsevier, vol. 28(C), pages 13-23.
    7. Keiko Ito & Ayumu Tanaka, . "Expansion of Overeas Production and the Impact on Employment in Domestic Supporting Industries: An Empirical Analysis Based on Buyer-Supplier Transaction Relationships," Chapters, in: Chine Hee HAHN & Dionisius Narjoko (ed.), Impact of Globalization on Labor Market, chapter 9, pages 232-284, Economic Research Institute for ASEAN and East Asia (ERIA).
    8. Mr. Joong S Kang, 2014. "Balance Sheet Repair and Corporate Investment in Japan," IMF Working Papers 2014/141, International Monetary Fund.
    9. ANDO Mitsuyo & KIMURA Fukunari, 2017. "Job Creation and Destruction at the Levels of Intra-firm Sections, Firms, and Industries in Globalization: The case of Japanese manufacturing firms," Discussion papers 17100, Research Institute of Economy, Trade and Industry (RIETI).

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