Is FDI Good for Employment? A Comprehensive Look into Vietnamese Firms
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Taking advantages of a rich firm-level database of Vietnam (with more than 1.3 million observations) and applying fixed effect techniques, we obtained a comprehensive look about three perspectives of quantity, quality, and location effect of FDI on employment (according to UNCTAD, 2014). We found that FDI indeed helps to raise employment (by 0.6%) (the quantity effect) and wages (by 0.3%) (the quality effect) of firms across Vietnam, but makes the provincial employment reduce by about 0.1% (the location effect). In addition, interestingly, the findings are also diversified across the four key industries and two different types of FDI-invested firms.
Abstract
Taking advantages of a rich firm-level database of Vietnam (with more than 1.3 million observations) and applying fixed effect techniques, we obtained a comprehensive look about three perspectives of quantity, quality, and location effect of FDI on employment (according to UNCTAD, 2014). We found that FDI indeed helps to raise employment (by 0.6%) (the quantity effect) and wages (by 0.3%) (the quality effect) of firms across Vietnam, but makes the provincial employment reduce by about 0.1% (the location effect). In addition, interestingly, the findings are also diversified across the four key industries and two different types of FDI-invested firms.