Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/8686.html
   My bibliography  Save this paper

Beyond Capital : Monitoring Development Outcomes of Multinational Enterprises

Author

Listed:
  • Lejárraga,Iza
  • Ragoussis,Alexandros
Abstract
This study presents a novel set of indicators on outcomes of foreign direct investment spanning 63 developing countries and 10 areas that matter for development. Building on decade-long data collection by the World Bank Enterprise Surveys, the indicators highlight systematic differences between foreign multinational enterprises and domestic firms across countries in competitiveness outcomes such as productivity, innovation, export orientation, as well as the extent to which they promote inclusiveness through job creation, gender empowerment, or supply linkages. Although there appears to be no striking trade-off between competitiveness and inclusiveness of foreign multinational enterprises, their premia differ substantially across regions and income groups. Differences in some key drivers of competitiveness, such as productivity, innovation, and skills transfer, appear to be increasing with income, although premia in most outcomes are stronger in lower-middle-income or low-income markets, highlighting the relevance of foreign multinational enterprises for socioeconomic progress in these contexts. Moreover, outcomes of foreign multinational enterprises in areas such as export orientation, skills transfer, and physical capital accumulation are more consistent across countries, whereas in other areas the outcomes display wide variation, suggesting potentially higher sensitivity to investor motivations, sectors, seasonal trends, and business environments. Policy efforts should take these differences into account, to devise investment strategies that not only seek to increase capital flows, but also enhance the benefits that could be derived from them.

Suggested Citation

  • Lejárraga,Iza & Ragoussis,Alexandros, 2018. "Beyond Capital : Monitoring Development Outcomes of Multinational Enterprises," Policy Research Working Paper Series 8686, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8686
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/342571545336579695/pdf/WPS8686.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Heyman, Fredrik & Sjoholm, Fredrik & Tingvall, Patrik Gustavsson, 2007. "Is there really a foreign ownership wage premium? Evidence from matched employer-employee data," Journal of International Economics, Elsevier, vol. 73(2), pages 355-376, November.
    2. Robert E. Lipsey, 1994. "Foreign-Owned Firms and U.S. Wages," NBER Working Papers 4927, National Bureau of Economic Research, Inc.
    3. C. Imbriani & R. Pittiglio & F. Reganati & E. Sica, 2014. "How Much do Technological Gap, Firm Size, and Regional Characteristics Matter for the Absorptive Capacity of Italian Enterprises?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 20(1), pages 57-72, February.
    4. Sourafel Girma, 2005. "Safeguarding Jobs? Acquisition FDI and Employment Dynamics in U.K. Manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(1), pages 165-178, April.
    5. Amiti, Mary & Smarzynska Javorcik, Beata, 2008. "Trade costs and location of foreign firms in China," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 129-149, February.
    6. repec:dau:papers:123456789/4457 is not listed on IDEAS
    7. Miao Wang, 2010. "Foreign direct investment and domestic investment in the host country: evidence from panel study," Applied Economics, Taylor & Francis Journals, vol. 42(29), pages 3711-3721.
    8. Echandi,Roberto & Krajcovicova,Jana & Qiang,Christine Zhenwei, 2015. "The impact of investment policy in a changing global economy : a review of the literature," Policy Research Working Paper Series 7437, The World Bank.
    9. Sourafel Girma & David Greenaway & Katharine Wakelin, 2013. "Who Benefits from Foreign Direct Investment in the UK?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(5), pages 560-574, November.
    10. Joel Deichmann & Socrates Karidis & Selin Sayek, 2003. "Foreign direct investment in Turkey: regional determinants," Applied Economics, Taylor & Francis Journals, vol. 35(16), pages 1767-1778.
    11. Mark E. Doms & J . Bradford Jensen, 1998. "Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 235-258, National Bureau of Economic Research, Inc.
    12. Tomohara, Akinori & Takii, Sadayuki, 2011. "Does globalization benefit developing countries? Effects of FDI on local wages," Journal of Policy Modeling, Elsevier, vol. 33(3), pages 511-521, May.
    13. Sjoholm, Fredrik & Lipsey, Robert E, 2006. "Foreign Firms and Indonesian Manufacturing Wages: An Analysis with Panel Data," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 201-221, October.
    14. Brian Aitken & Ann Harrison & Robert E. Lipsey, 2022. "Wages and foreign ownership A comparative study of Mexico, Venezuela, and the United States," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 4, pages 61-87, World Scientific Publishing Co. Pte. Ltd..
    15. Christian Hilber & Ioan Voicu, 2010. "Agglomeration Economies and the Location of Foreign Direct Investment: Empirical Evidence from Romania," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 355-371.
    16. Elissa Braunstein & Mark Brenner, 2007. "Foreign direct investment and gendered wages in urban China," Feminist Economics, Taylor & Francis Journals, vol. 13(3-4), pages 213-237.
    17. Francesca Fabbri & Jonathan E. Haskel & Matthew J. Slaughter, 2003. "Does Nationality Of Ownership Matter For Labor Demands?," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 698-707, 04/05.
    18. Holger Görg & Eric Strobl & Frank Walsh, 2016. "Why Do Foreign-Owned Firms Pay More? The Role of On-the-Job Training," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 3, pages 33-51, World Scientific Publishing Co. Pte. Ltd..
    19. Jennifer P. Poole, 2013. "Knowledge Transfers from Multinational to Domestic Firms: Evidence from Worker Mobility," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 393-406, May.
    20. Xiaoling Shu & Yifei Zhu & Zhanxin Zhang, 2007. "Global Economy and Gender Inequalities: The Case of the Urban Chinese Labor Market," Social Science Quarterly, Southwestern Social Science Association, vol. 88(5), pages 1307-1332, December.
    21. Hijzen, Alexander & Martins, Pedro S. & Schank, Thorsten & Upward, Richard, 2013. "Foreign-owned firms around the world: A comparative analysis of wages and employment at the micro-level," European Economic Review, Elsevier, vol. 60(C), pages 170-188.
    22. Dirk Willem Te Velde & Theodora Xenogiani, 2007. "Foreign Direct Investment and International Skill Inequality," Oxford Development Studies, Taylor & Francis Journals, vol. 35(1), pages 83-104.
    23. Tomas Havranek & Zuzana Irsova, 2012. "Survey Article: Publication Bias in the Literature on Foreign Direct Investment Spillovers," Journal of Development Studies, Taylor & Francis Journals, vol. 48(10), pages 1375-1396, October.
    24. Blalock, Garrick & Gertler, Paul J., 2009. "How firm capabilities affect who benefits from foreign technology," Journal of Development Economics, Elsevier, vol. 90(2), pages 192-199, November.
    25. Fosfuri, Andrea & Motta, Massimo & Ronde, Thomas, 2001. "Foreign direct investment and spillovers through workers' mobility," Journal of International Economics, Elsevier, vol. 53(1), pages 205-222, February.
    26. Charles Cadestin & Koen De Backer & Isabelle Desnoyers-James & Sébastien Miroudot & Ming Ye & Davide Rigo, 2018. "Multinational enterprises and global value chains: New Insights on the trade-investment nexus," OECD Science, Technology and Industry Working Papers 2018/05, OECD Publishing.
    27. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    28. Lipsey, Robert E. & Sjoholm, Fredrik, 2004. "Foreign direct investment, education and wages in Indonesian manufacturing," Journal of Development Economics, Elsevier, vol. 73(1), pages 415-422, February.
    29. Amendolagine, Vito & Boly, Amadou & Coniglio, Nicola Daniele & Prota, Francesco & Seric, Adnan, 2013. "FDI and Local Linkages in Developing Countries: Evidence from Sub-Saharan Africa," World Development, Elsevier, vol. 50(C), pages 41-56.
    30. Cheung Kui-yin & Lin, Ping, 2004. "Spillover effects of FDI on innovation in China: Evidence from the provincial data," China Economic Review, Elsevier, vol. 15(1), pages 25-44.
    31. Hartmut Egger & Udo Kreickemeier, 2017. "Why Foreign Ownership May be Good for You," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 13, pages 381-421, World Scientific Publishing Co. Pte. Ltd..
    32. repec:bla:rdevec:v:14:y:2010:i:s1:p:640-655 is not listed on IDEAS
    33. Andrew B. Bernard & Fredrik Sjoholm, 2003. "Foreign Owners and Plant Survival," NBER Working Papers 10039, National Bureau of Economic Research, Inc.
    34. Laura Alfaro, 2017. "Gains from Foreign Direct Investment: Macro and Micro Approaches," The World Bank Economic Review, World Bank, vol. 30(Supplemen), pages 2-15.
    35. Bandick, Roger, 2004. "Do Workers Benefit from Foreign Ownership? Evidence from Swedish manufacturing," Working Paper Series 201, Trade Union Institute for Economic Research.
    36. Beata S. Javorcik, 2015. "Does FDI Bring Good Jobs to Host Countries?," The World Bank Research Observer, World Bank, vol. 30(1), pages 74-94.
    37. Rachel Griffith, 1999. "Using the ARD establishment level data to look at foreign ownership and productivity in the UK," IFS Working Papers W99/06, Institute for Fiscal Studies.
    38. Moran, Theodore H. & Görg, Holger & Seric, Adnan, 2016. "Quality FDI and Supply-Chains in Manufacturing: Overcoming Obstacles and Supporting Development," KCG Policy Papers 1, Kiel Centre for Globalization (KCG).
    39. Beata S. Javorcik & Alessia Lo Turco & Daniela Maggioni, 2018. "New and Improved: Does FDI Boost Production Complexity in Host Countries?," Economic Journal, Royal Economic Society, vol. 128(614), pages 2507-2537, September.
    40. Peter Glick & François Roubaud, 2006. "Export Processing Zone Expansion in Madagascar: What are the Labour Market and Gender Impacts?," Journal of African Economies, Centre for the Study of African Economies, vol. 15(4), pages 722-756, December.
    41. Griffith, Rachel, 1999. "Using the ARD Establishment Level Data to Look at Foreign Ownership and Productivity in the United Kingdom," Economic Journal, Royal Economic Society, vol. 109(456), pages 416-442, June.
    42. Laura Alfaro & Andrew Charlton, 2009. "Intra-industry Foreign Direct Investment," American Economic Review, American Economic Association, vol. 99(5), pages 2096-2119, December.
    43. Sandrine Cazes & Alexander Hijzen & Anne Saint-Martin, 2015. "Measuring and Assessing Job Quality: The OECD Job Quality Framework," OECD Social, Employment and Migration Working Papers 174, OECD Publishing.
    44. Vito Amendolagine & Mr. Andrea F Presbitero & Roberta Rabellotti & Marco Sanfilippo & Adnan Seric, 2017. "FDI, Global Value Chains, and Local Sourcing in Developing Countries," IMF Working Papers 2017/284, International Monetary Fund.
    45. Charles Cadestin & Koen De Backer & Isabelle Desnoyers-James & Sébastien Miroudot & Davide Rigo & Ming Ye, 2018. "Multinational enterprises and global value chains: the OECD analytical AMNE database," OECD Trade Policy Papers 211, OECD Publishing.
    46. Sjoholm, Fredrik & Lipsey, Robert E, 2006. "Foreign Firms and Indonesian Manufacturing Wages: An Analysis with Panel Data," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 201-221, October.
    47. Martin J. Conyon & Sourafel Girma & Steve Thompson & Peter W. Wright, 2002. "The productivity and wage effects of foreign acquisition in the United Kingdom," Journal of Industrial Economics, Wiley Blackwell, vol. 50(1), pages 85-102, March.
    48. repec:bla:scotjp:v:48:y:2001:i:2:p:119-33 is not listed on IDEAS
    49. Siegmann, Karin Astrid, 2007. "Globalisation, Gender, and Equity: Effects of Foreign Direct Investment on Labour Markets in Rural Indonesia," Proceedings of the German Development Economics Conference, Göttingen 2007 30, Verein für Socialpolitik, Research Committee Development Economics.
    50. Havranek, Tomas & Irsova, Zuzana, 2011. "Estimating vertical spillovers from FDI: Why results vary and what the true effect is," Journal of International Economics, Elsevier, vol. 85(2), pages 234-244.
    51. Deborah L. Swenson & Huiya Chen, 2014. "Multinational Exposure and the Quality of New Chinese Exports," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(1), pages 41-66, February.
    52. Rossitza B. Wooster & David S. Diebel, 2010. "Productivity Spillovers from Foreign Direct Investment in Developing Countries: A Meta‐Regression Analysis," Review of Development Economics, Wiley Blackwell, vol. 14(3), pages 640-655, August.
    53. Klaus E Meyer & Evis Sinani, 2009. "When and where does foreign direct investment generate positive spillovers? A meta-analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(7), pages 1075-1094, September.
    54. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October.
    55. Roger Bandick & Patrik Karpaty, 2007. "Foreign Acquisition and Employment Effects in Swedish Manufacturing," Discussion Papers 07/35, University of Nottingham, GEP.
    56. Ragnhild Balsvik & Stefanie A. Haller, 2010. "Picking “Lemons” or Picking “Cherries”? Domestic and Foreign Acquisitions in Norwegian Manufacturing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(2), pages 361-387, June.
    57. Julan Du & Yi Lu & Zhigang Tao, 2012. "Bank loans vs. trade credit," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(3), pages 457-480, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Heyman, Fredrik & Sjoholm, Fredrik & Tingvall, Patrik Gustavsson, 2007. "Is there really a foreign ownership wage premium? Evidence from matched employer-employee data," Journal of International Economics, Elsevier, vol. 73(2), pages 355-376, November.
    2. Cagatay Bircan, 2013. "Foreign direct investment and wages: does the level of ownership matter?," Working Papers 157, European Bank for Reconstruction and Development, Office of the Chief Economist.
    3. Rosanna Pittiglio & Filippo Reganati & Edgardo Sica, 2015. "Do Multinational Enterprises Push up the Wages of Domestic Firms in the Italian Manufacturing Sector?," Manchester School, University of Manchester, vol. 83(3), pages 346-378, June.
    4. Sourafel Girma & Holger Görg & Erasmus Kersting, 2019. "Which boats are lifted by a foreign tide? Direct and indirect wage effects of foreign ownership," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(6), pages 923-947, August.
    5. Neil Foster-McGregor, 2012. "Innovation and Technology Transfer across Countries," wiiw Research Reports 380, The Vienna Institute for International Economic Studies, wiiw.
    6. Khadija Straaten & Niccolò Pisani & Ans Kolk, 2020. "Unraveling the MNE wage premium," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(9), pages 1355-1390, December.
    7. Ding, Ding, 2015. "Leaning from multinational companies through hiring: An empirical investigation," Working Paper Series in Economics and Institutions of Innovation 402, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    8. World Bank Group, 2017. "Investment Policy and Promotion Diagnostics and Tools," World Bank Publications - Reports 28281, The World Bank Group.
    9. Uros Delevic & James Kennell, 2022. "Multinationals And Wages: Evidence From Employer–Employee Data In Serbia," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(232), pages 49-80, January –.
    10. Chen, Zhihong & Ge, Ying & Lai, Huiwen, 2011. "Foreign Direct Investment and Wage Inequality: Evidence from China," World Development, Elsevier, vol. 39(8), pages 1322-1332, August.
    11. Rajneesh Narula & André Pineli, 2017. "Multinational Enterprises and Economic Development in Host Countries: What We Know and What We Don’t Know," Palgrave Studies in Impact Finance, in: Gianluigi Giorgioni (ed.), Development Finance, chapter 6, pages 147-188, Palgrave Macmillan.
    12. Blanas, Sotiris. & Seric, Adnan. & Viegelahn, Christian,, 2017. "Jobs, FDI and institutions in Sub-Saharan Africa evidence from firm-level data," ILO Working Papers 994987491902676, International Labour Organization.
    13. Halvarsson, Daniel & Lark, Olga & Gustavsson Tingvall, Patrik, 2022. "Foreign Ownership and Transferring of Gender Norms," Working Paper Series 1433, Research Institute of Industrial Economics.
    14. David C Mare & Lynda Sanderson & Richard Fabling, 2014. "Earnings and Employment in Foreign-owned Firms," Treasury Working Paper Series 14/16, New Zealand Treasury.
    15. Gianluca Orefice & Nicholas Sly & Farid Toubal, 2021. "Cross-Border Merger and Acquisition Activity and Wage Dynamics," ILR Review, Cornell University, ILR School, vol. 74(1), pages 131-162, January.
    16. Nguyen, Dao Thi Hong, 2019. "Inward foreign direct investment and local wages: The case of Vietnam’s wholesale and retail industry," Journal of Asian Economics, Elsevier, vol. 65(C).
    17. Halvarsson, Daniel & Lark, Olga & Gustavsson Tingvall, Patrik, 2022. "Foreign Ownership and Transferring of Gender Norms," Working Papers 2022:6, Lund University, Department of Economics.
    18. Arnold, Jens Matthias & Javorcik, Beata Smarzynska, 2005. "Gifted kids or pushy parents? Foreign acquisitions and plant performance in Indonesia," Policy Research Working Paper Series 3597, The World Bank.
    19. Yoshimichi Murakami & Keijiro Otsuka, 2017. "A Review of the Literature on Productivity Impacts of Global Value Chains and Foreign Direct Investment: Towards an Integrated Approach," Discussion Paper Series DP2017-19, Research Institute for Economics & Business Administration, Kobe University, revised Aug 2019.
    20. Jordaan,Jacob Arie & Douw,Willem & Qiang,Zhenwei, 2020. "Multinational Corporation Affiliates, Backward Linkages, and Productivity Spillovers in Developing and Emerging Economies : Evidence and Policy Making," Policy Research Working Paper Series 9364, The World Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:8686. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.