Bachmann, Ronald; Baumgarten, Daniel; Stiebale, Joel
Foreign direct investment, heterogeneous workers and employment security: Evidence from Germany.
In: Canadian Journal of Economics/Revue canadienne d'economique, Vol. 47, No. 3: pp. 720-757
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We analyze how foreign direct investment (FDI) affects employment security using administrative microdata for German employees. Measuring FDI intensity at the industry level enables us to take into account the sum of direct effects at multinationals as well as indirect effects of FDI throughout the affected industry. We find that both inward and outward FDI significantly reduce employment security. This is particularly the case for inward FDI coming from the western part of the European Union as well as for outward FDI going to Central and Eastern Europe. The effects are sizeable for older and low-skilled workers.