DP16964 Curse or Blessing? Multinational Corporations and Labor Supply in Africa

Author(s): Mariapia Mendola, Giovanni Prarolo, Tommaso Sonno
Publication Date: January 2022
Keyword(s): Africa, job quality, Labor Supply, Multinational Enterprises
JEL(s): F16, F23, F66, J01, O12
Programme Areas: Development Economics, Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16964

Do multinational enterprises create local job opportunities in developing countries? We address this largely unanswered question by combining geolocalised individual-level data with information on domestic and foreign multinationals' affiliates in Sub-Saharan Africa over more than a decade. Having a multinational's affiliate within walking distance correlates with an increase in employment of +4.3% with respect to the sample mean. Multinationals' activity is correlated with higher off-farm and lower on-farm employment (+13% and -7%, respectively), a result driven by affiliates of foreign companies. Female employment and "good jobs" increase around affiliates, but only when they are part of foreign groups.