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Employment Protection and FDI Revisited: New Evidence from Micro Data

Norbäck, Pehr-Johan, Skedinger, Per and Duanmu, Jing-Lin (2019) Employment Protection and FDI Revisited: New Evidence from Micro Data The World Economy.

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We use micro data on affiliates to Swedish multinational firms (MNEs) to explore the impact of more stringent employment protection legislation (EPL) on foreign direct investment (FDI). We add to the previous literature by exploring the impact of EPL on the extensive as well as intensive margin, and by distinguishing the impact on different types of affiliates. We find that employment and exports in exporting affiliates decline with EPL, and MNEs establish fewer exporting affiliates. In contrast, employment and sales rise with EPL in purely “horizontal” affiliates. We discuss possible mechanisms explaining this sharp asymmetry.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
Norbäck, Pehr-Johan
Skedinger, Per
Date : 2019
Copyright Disclaimer : Copyright © 2019 John Wiley & Sons, Inc. All rights reserved.
Uncontrolled Keywords : Labor market institutions; Employment protection; FDI; Micro data
Related URLs :
Depositing User : Clive Harris
Date Deposited : 22 Mar 2019 08:47
Last Modified : 22 Mar 2019 09:00

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