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The Effects of Overseas Operations on Home Employment of Japanese Multinational Enterprises

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  • Nobuaki Yamashita
  • Kyoji Fukao

Abstract

This paper examines the hypothesis that expansion of overseas operations of Japanese manufacturing multinational enterprises (MNEs) reduces home employment. While the existing studies are mainly based on the industry level, this paper presents the evidence using newly constructed firm-level panel data set over the period 1991-2002. In spite of concerns expressed about the adverse effects of FDI on the domestic economy, the evidence does not support the view that overseas operations expand at the cost of home employment in Japan. On the contrary, the findings suggest that overseas operations have somewhat helped to maintaining the level of home employment in Japanese manufacturing during the period under study. However, the results are sensitive to the estimation method used and whether the estimation is based on the panel data set is balanced or unbalanced.

Suggested Citation

  • Nobuaki Yamashita & Kyoji Fukao, 2008. "The Effects of Overseas Operations on Home Employment of Japanese Multinational Enterprises," Hi-Stat Discussion Paper Series d08-251, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hst:hstdps:d08-251
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    File URL: http://hi-stat.ier.hit-u.ac.jp/research/discussion/2008/pdf/D08-251.pdf
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    References listed on IDEAS

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    Cited by:

    1. Gu Huijie, 2018. "Outward foreign direct investment and employment in Japan’s manufacturing industry," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 7(1), pages 1-13, December.

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    More about this item

    Keywords

    Multinational Enterprises; FDI; Labour demand; hollowing out of manufacturing; Japan;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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