TY - CEPII
A1 - Alexander Hijzen
A1 - S├ębastien Jean
A1 - Thierry Mayer
TI - The Effects at Home of Initiating Production Abroad: Evidence from Matched French Firms
IS - 2009-39
T3 - Working Papers
KW - FDI
KW - MULTINATIONALS
KW - PROPRENSITY SCORE MATCHING
KW - SERVICES
KW - DELOCALISATION
N2 - Based on matching techniques in combination with a difference-in-difference estimator, this paper estimates the effects at home of initiating production abroad through the establishment of a foreign production affiliate. The analysis covers manufacturing and service firms active in France during the period 1987-1999. We show that the motivation to start producing abroad is an important determinant of its impact at home. Market-seeking FDI in manufacturing is associated with significant scale effects, resulting in job creation. By contrast, factor-seeking FDI in manufacturing has no significant effect on employment. However, there is some evidence that this type of FDI is associated with technology effects, in the form of greater capital-intensity and efficiency, as well as larger exports. Finally, FDI in service sectors is associated with significant positive employment effects, presumably reflecting the importance of the market-seeking motive in these sectors.
ER -