Seminar
Dr. Esther Gehrke (WUR) ''Regulating Manufacturing FDI: Local Labor Market Responses to a Protectionist Policy in Indonesia''
On Tuesday October 17, Esther Gehrke (AEP) will give a seminar on her paper entitled “Regulating Manufacturing FDI: Local Labor Market Responses to a Protectionist Policy in Indonesia"
The seminar will take place in room B0079 between 12:00-13:00.
Lunch will be provided.
Abstract:
We analyze the effect of rising protectionism towards foreign direct investment (FDI) on employment and domestic firm creation, exploiting revisions in Indonesia’s highly-granular negative investment list, and spatial variation in the exposure of the manufacturing sector to these investment restrictions. Rising restrictions caused employment gains at the local level, both in the manufacturing as well as in the services sector. The documented employment gains go along with a reorganization of the local production structure: local exposure to FDI restrictions is linked to new firm entries in the manufacturing sector that are concentrated among micro and small enterprises. Spillover-effects to the services sector seem to be driven by a rise in immigration and benefited medium to large enterprises the most, potentially because these were better able to respond to the increased demand for local services.