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The effects of internationalisation on domestic labour demand by skills : Firm-level evidence for Belgium

Author

Listed:
  • Ludo Cuyvers

    (University of Antwerp
    North-West University (Potchefstroom Campus), South Africa)

  • Emmanuel Dhyne

    (National Bank of Belgium, Research Department
    Université de Mons, Centre de recherche Warocqué)

  • Reth Soeng

    (University of Antwerp, Steunpunt Buitenlands Beleid)

Abstract
We empirically investigate the effects of the internationalisation of Belgian firms on domestic demand for production and non-production workers, which are used as proxies for unskilled and skilled labour. Distinction is made between home-employment effects of firms’ internationalisation, through either international trade or outward foreign direct investment, in highincome countries and in low-income economies. The results of our econometric analysis, using data over 1997-2007, suggest that increasing import shares from low-income countries or investing in those countries significantly reduces demand for low-skilled labour, while it increases demand for skilled labour. An increase in exports generally raises the demand for production workers, while it reduces the demand for non-production workers. However, these effects are reversed in the case of exports to low-income countries. Considering the impact of FDI, our results tentatively suggest that the setting up of a new international investment project has a positive impact on demand for non-production workers one period before it is made. This positive effect is offset in the long run, particularly in the case of investment in low-income countries.

Suggested Citation

  • Ludo Cuyvers & Emmanuel Dhyne & Reth Soeng, 2010. "The effects of internationalisation on domestic labour demand by skills : Firm-level evidence for Belgium," Working Paper Research 206, National Bank of Belgium.
    • Handle: RePEc:nbb:reswpp:201010-206
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    File URL: https://www.nbb.be/doc/ts/publications/wp/wp206en.pdf
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    References listed on IDEAS

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    1. Oscar Bajo-Rubio & Carmen D Mora, 2015. "On the employment effects of outward FDI: the case of Spain, 1995-2011," Applied Economics, Taylor & Francis Journals, vol. 47(21), pages 2127-2141, May.

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    More about this item

    Keywords

    labour demand; international trade; outward FDI; skilled and unskilled labour;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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