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Does foreign investment hurt job creation at home? The geography of outward FDI and employment in the USA

Crescenzi, Riccardo, Ganau, Roberto and Storper, Michael (2021) Does foreign investment hurt job creation at home? The geography of outward FDI and employment in the USA. Journal of Economic Geography. ISSN 1468-2702 (In Press)

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Abstract

Rising political skepticism on the benefits of global economic integration has increased public scrutiny of the foreign activities of domestic firms in virtually all advanced economies. Decisions to invest in new activities abroad are seen by some commentators as potentially detrimental to domestic employment. We contribute to this debate by scrutinizing the relationship between outward ‘greenfield’ Foreign Direct Investments (FDI) and local employment levels. The analysis, at the scale of USA Economic Areas, finds a generally positive link between outward investment and local employment, but with an important range of differences across regions and sectors. Less developed regions benefit the most from the positive returns of outward FDI, and, particularly, from outward FDI if it is undertaken by firms in high-tech manufacturing and services industries. But there is a downside, in the form of increasing intra-regional inequalities between high-skilled and low-skilled workers in these areas.

Item Type: Article
Official URL: https://academic.oup.com/joeg
Additional Information: © 2021 The Authors
Divisions: Geography & Environment
Subjects: H Social Sciences > HD Industries. Land use. Labor
Date Deposited: 14 Apr 2021 10:27
Last Modified: 28 Apr 2021 08:42
URI: http://eprints.lse.ac.uk/id/eprint/109864

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