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Brown Bag Seminar: “Foreign direct investment and structural transformation in Africa”
May 30, 2023 @ 12:15 pm - 5:00 pm
Margherita Tambussi, from the University of Turin and Collegio Carlo Alberto (Italy), is WTI’s guest for the next Brown Bag on the topic of FDIs.
Abstract
This paper analyzes the relationship between inward FDI and the structural transformation of local labor markets in Africa. We combine geolocalized information on the distribution of FDI with a novel database that provides information from 40,665,627 individuals in 2,570 subnational units over the period 1987-2019.
Results are suggestive of a positive effect of FDI on structural transformation. FDI contributes to an increase in employment, and shifts of workers towards modern industries and higher-skilled occupations. No effects are found on self-employment. Results are heterogenous, reflecting the characteristics of the foreign investor and of the business activity undertaken by foreign firms in the local market.
Geospatial analysis of changes in performance of domestic firms exposed to nearby FDI projects provides evidence of horizontal spillovers and inter-industry linkages, suggesting a complementary mechanism through which FDI drives structural change.
More info to follow. Keep watching this space!