Foreign-Owned Plants and Job Security
University of Nottingham Research Paper No. 2007/36
35 Pages Posted: 21 Nov 2007
Date Written: November 2007
We investigate the hypothesis that workers in foreign-owned establishments face greater job insecurity. Using linked employer employee data from Germany, we examine whether foreign-owned establishments are more likely to exit production, and whether workers in foreign-owned establishments face higher separation rates, net of establishment exit. We find that, after controlling for the different characteristics of foreign and domestic establishments, foreign establishments have higher exit rates and higher separation rates, but the effect is quantitatively small. In contrast, foreign-owned establishments which do not export appear to have considerably higher exit rates and separation rates.
Keywords: Foreign ownership, job security, linked employer-employee data
JEL Classification: F23, J63, C41
Suggested Citation: Suggested Citation