Effects of Inward and Outward Greenfield FDI on Employment by Domestic Firms: The Korean Experience

초록

Through the construction of new facilities, greenfield FDI is certain to result in the hiring of new workers in the host country. This paper empirically investigates the effects of inward greenfield on employment by domestic firms in South Korea. We construct a panel of 1,328 Korean firms in 20 industries for the period 2004-2015 and link this to greenfield FDI data acquired from fDi Markets (Financial Times Ltd.). We find that inward greenfield FDI leads to increased employment by domestic firms. It is found to be particularly pronounced in the goods sector (i.e., primary and manufacturing). This effect becomes stronger when the source countries of greenfield FDI are developed countries.

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