Eduardo Ibarra-Olivo (p)

Marco Bellandi

Despite the growing body of literature devoted to studying the employment effects of outward FDI (OFDI) on the home economy, evidence on the effects is still inconclusive, with the main focus being developed economies. Domestic firms invest at home and abroad, implying both negative and positive employment effects. Net effects will depend on a variety of factors; type of industry, investment motives and competitive context of host economies, as well as labour market and macroeconomic conditions. In the case of developed countries, although evidence is not conclusive, in general OFDI has been found to increase, at least marginally, overall levels of domestic employment, accompanied by changes in the skills composition. OFDI has been generally thought of a consequence of economic development. Thus, very little attention has been paid to the contribution which OFDI makes to the development of home countries when the investing multinationals are from less advanced economies. The early 2000s saw significant changes in the patterns of cross-border investments as more companies from developing and emerging economies increased their participation in the world’s total foreign direct investment. Despite the significant rise of emerging country multinationals in the global investment landscape, evidence on OFDI effects on employment and skills in home emerging economies is relatively scant. Furthermore, whether the particular destination country of OFDI matters for the employment in the industry-region of the firm, very much remains an empirical question, especially in the context of emerging economies. Against this background, Mexico represents a good case to study the home-effects of outward FDI for two main reasons. First, as an emerging economy it is still an important recipient of inward FDI, while at the same time many Mexican firms are becoming important investors abroad. Second, despite these trends, Mexican labour markets are still very fragmented, and the skill distribution remains highly skewed towards the lower end. This paper addresses three questions in turn. First, we investigate the extent to which OFDI is associated with changes in employment in Mexican industry-regions. In other words, whether investing abroad leads to decreases in the aggregate demand for labour in the relevant labour markets. Second, we enquire if increasing FDI outflows are associated with changes in the skill composition of local labour markets by shifting the demand for certain skills. Lastly, we ask whether the effects on labour demand for different skills vary according to the country of OFDI destination.

Emma Lappi (p)

Marco Bellandi

This paper studies whether new hires with entrepreneurship experience enhance the productivity of firms. Hiring previously entrepreneurs is therefore a source of knowledge transfer which can be utilized for consequent productivity. The relationship between hiring of previous entrepreneurs and productivity is found to have little or no effects after the year of hiring but found to have persistent positive effects in consequent years. We in addition dis-entangle employer and industry specific experience of the newly hired as well as measure different skill levels which matter extensively. We compare the results with newly hired from unemployment and vis-à-vis inter-firm mobility.