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To whom does outward FDI give jobs?

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Frame of Image 414-1251 Fax: 82-44-414-1144 URL: http://www.kiep.go.kr URL: http://www.kiep.go.kr HYUN Jung Jung President HYUN Taik, Taik, President KIEP Working PaperPaper 16-07 KIEP Working 16-07 Published September 30, 2016 in KoreaKorea by KIEP Published September 30, 2016 in by KIEP ISBN ISBN 978-89-322-4258-3 94320 978-89-322-4258-3 94320 978-89-322-4026-8(set) 978-89-322-4026-8(set) Price Price 3 USD USD 3
2016 KIEP KIEP 2016
Executive Summary
In this paper, we examine the impact of outward foreign direct investment (OFDI) on the overall employment, using Korean industry-level data for the period 2007-2014. We further decompose the effects of OFDI into types of foreign investment and workers’ skill levels, separately for each employment status (permanent and temporary), so that we capture whether the MNEs initiating foreign investment prefer to employ temporary instead of permanent workers. Our main findings show that there is little evidence of the impact of OFDI on the overall industry employment of permanent workers, while OFDI is positively associated with the overall employment of temporary workers. Besides, OFDI leads to an increase in the number of jobs created for mediumskilled workers regardless of employment status, whereas there is a negative relationship between OFDI and the temporary employment of low-skilled workers. To be more specific, efficiency-seeking and export-platform-seeking types of OFDI is associated with an increase in the employment of mediumskilled work


Full Text
Title To whom does outward FDI give jobs?
Similar Titles
Material Type Reports
Author(English)

Kang, Youngho; Whang, Unjung

Publisher

Sejong, South Korea:Korea Institute for International Economic Policy

Date 2016-09
Series Title; No Working paper / 16-07
ISBN 978-89-322-4258-3; 978-89-322-4026-8(set)
Pages 50
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Direct Investment
Social Development < Employment
Holding KIEP

Abstract

In this paper, we examine the impact of outward foreign direct investment (OFDI) on the overall employment, using Korean industry-level data for the period 2007-2014. We further decompose the effects of OFDI into types of foreign investment and workers’ skill levels, separately for each employment status (permanent and temporary), so that we capture whether the MNEs initiating foreign investment prefer to employ temporary instead of permanent workers. Our main findings show that there is little evidence of the impact of OFDI on the overall industry employment of permanent workers, while OFDI is positively associated with the overall employment of temporary workers. Besides, OFDI leads to an increase in the number of jobs created for mediumskilled workers regardless of employment status, whereas there is a negative relationship between OFDI and the temporary employment of low-skilled workers. To be more specific, efficiency-seeking and export-platform-seeking types of OFDI is associated with an increase in the employment of medium- skilled workers.