abstract

Using linked data on German manufacturing employees and their employers' multinational activities, we document that multinational enterprises (MNEs) exhibit four percent smaller rates of job loss than non-MNEs. The higher retention rates at MNEs cannot be explained by a comprehensive set of present or past employee, employer and sector characteristics alone. A significant part of the higher worker retention rates at MNEs is either due to the MNE's foreign expansion itself or to the employer's inherent competitive success across locations. Significantly higher worker retention rates at MNEs are consistent with the notion that hindering MNEs in their foreign expansions would result in even more domestic job losses to globalization.

keywords: Multinational enterprises; international investment; demand for labor; worker separations; linked employer-employee data

jel: F21, F23, J23, J63

background

• supporting files
  • main tables and additional tables [pdf 146k]
• data
  • midi [pdf 258k] (descriptive statistics, in german [pdf 921k])
• subsequent analysis with propensity-score matching in "The effect of FDI on job security" [pdf 320k]