The Effects of FDI on Domestic Employment and Workforce Composition

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 a...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Author TANAKA Ayumu
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2012
Subjects
Employment
Manufacturing
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Summary: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.