Foreign direct investment and search unemployment: Theory and evidence

Hans-Joerg Schmerer ()

No 201204, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "This paper proposes a simple multi-industry trade model with search frictions in the labor market. Unimpeded access to global financial markets enables capital owners to invest abroad, thereby fostering unemployment at the extensive industry margin. Whether a country benefits from FDI in terms of unemployment depends on the respective country's net-FDI, measured as the difference between in- and outward FDI. The derived FDI and unemployment nexus is tested employing macroeconomic data for 19 OECD countries on unemployment, FDI, and labor market institutions. Results support the model in that net-FDI is robustly associated with lower rates of aggregate unemployment." (Author's abstract, IAB-Doku) ((en))

Keywords: Auslandsinvestitionen; Außenhandel; Beschäftigungseffekte; friktionelle Arbeitslosigkeit; institutionelle Faktoren; internationaler Vergleich; OECD; Sucharbeitslosigkeit; Arbeitskräftenachfrage; Arbeitslosenquote; Arbeitsmarktpolitik; Wirtschaftszweige; 1980-2003 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2012
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Journal Article: Foreign direct investment and search unemployment: Theory and evidence (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:201204

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