Working Paper: CEPR ID: DP16964
Authors: Mariapia Mendola; Giovanni Prarolo; Tommaso Sonno
Abstract: Do multinational enterprises create local job opportunities in developing countries? We address this largely unanswered question by combining geolocalised individual-level data with information on domestic and foreign multinationals' affiliates in Sub-Saharan Africa over more than a decade. Having a multinational's affiliate within walking distance correlates with an increase in employment of +4.3% with respect to the sample mean. Multinationals' activity is correlated with higher off-farm and lower on-farm employment (+13% and -7%, respectively), a result driven by affiliates of foreign companies. Female employment and "good jobs" increase around affiliates, but only when they are part of foreign groups.
Keywords: multinational enterprises; labor supply; job quality; africa
JEL Codes: F23; F66; F16; O12; J01
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Having a multinational affiliate within 5 km (R32) | Increase in employment (J23) |
| MNE activity (F23) | Increase in off-farm employment (J43) |
| MNE activity (F23) | Decrease in on-farm employment (J43) |
| Foreign affiliates (F23) | Increase in off-farm employment (J43) |
| Domestic affiliates (L14) | Positive impact on on-farm employment (J43) |
| Foreign affiliates (F23) | Improve female employment (J21) |
| Foreign affiliates (F23) | Improve quality of jobs (permanent vs. seasonal) (J68) |
| Foreign MNEs from non-colonial backgrounds (F23) | More positive impact on local employment (F69) |