The Effect of Outward Foreign Direct Investments on Home Employment: Evidence using Swiss Firm-Level Data

Kalambaden, Preetha; Steffen, Daniel (2020). The Effect of Outward Foreign Direct Investments on Home Employment: Evidence using Swiss Firm-Level Data (CRED Research Paper 28). Bern: CRED Center for Regional Economic Development

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This paper investigates the effect of outward foreign direct investments (FDI) on home employment in an understudied context - a small economy with a large relative outward FDI stock. Using Swiss firm-level data we construct a novel instrumental variable to identify a direct negative displacement effect and an indirect positive output effect. We find that FDI to high-income countries have a positive effect on domestic jobs, while FDI to lower middle-income countries are associated with a loss of domestic jobs. Further, FDI to low-income countries tend to have a positive effect on home employment. Overall, the effect of outward FDI on home employment is small and tends to create more domestic jobs than it relocates.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Kalambaden, Preetha and Steffen, Daniel

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

CRED Research Paper

Publisher:

CRED Center for Regional Economic Development

Language:

English

Submitter:

Dino Collalti

Date Deposited:

13 Jan 2021 16:44

Last Modified:

13 Jan 2021 16:51

BORIS DOI:

10.48350/151257

URI:

https://boris.unibe.ch/id/eprint/151257

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