Transnational Corporations - Volume 27, Issue 3, 2021

Foreign direct investment (FDI) and multinational enterprises (MNEs) are important sources of financing for developing countries. In this context, the United Nations Conference on Trade and Development (UNCTAD) has a long track-record of looking at both spillovers from FDI and gender equality. The policy study on investment by transnational corporations and gender provided a preliminary review of the academic literature on the impact of foreign investment on gender policy and practice, focusing on the wage and employment effects, and the related potential for women’s empowerment (UNCTAD, 2014). In addition, the 2020 World Investment Report (UNCTAD, 2020a) describes that the world’s leading multinational enterprises are increasing their gender equality reporting and policies, contributing to broader female representation and positive development impacts. Finally, several of the papers in this special issue served as background research for the UNCTAD (forthcoming) policy report on The International Transmission of Gender Policies and Practices: The Role of Multinational Enterprises. This original academic research was presented at an expert group meeting in May 2020, which brought together researchers, practitioners, and policymakers to discuss tangible policy recommendations and development impacts, while formally validating the quality of the research as part of the review process.

This paper analyses the effect of foreign ownership on female employment using micro-level data from the Chilean Manufacturing Survey. Particularly, it examines whether foreign-acquired firms hire proportionately more female workers than domestic firms. To control for the possible endogeneity of the foreign acquisition decision, we use propensity score matching combined with a difference-in- differences approach. In addition, we compare firms operating in the same industry-year. Our results show that foreign ownership increases the share of female workers within the firm. One year after acquisition the share of female workers is 1.64 percentage points higher in acquired firms than in non-acquired firms, and this figure increases to 3.55 percentage points two years after acquisition. When we separate female workers into skilled and unskilled categories, we observe that the positive effect of foreign acquisition is present only for skilled women. One year after acquisition, the share of skilled women is 4.60 percentage points higher in acquired firms than in non-acquired ones, and two years after acquisition this figure increases to 6.63 percentage points. We also present evidence that foreign acquisition increases the share of skilled women only when the acquired firm was not an exporter before its acquisition, supporting Becker’s (1957) theory on taste- based discrimination.

This paper examines the effect of foreign direct investment (FDI) on female employment and wages in India. Using both household-level and plant-level data, it estimates the impact of industry-level FDI inflows on employment, wages and the gender wage gap for skilled and unskilled female workers. Further, it estimates whether there are any “cultural transfers” or spillovers in terms of gender norms from more gender-equal countries through this FDI. In order to estimate this, a weighted industry-level Gender Inequality Index (GII) is created. The main findings are that although FDI leads to an increase in employment of unskilled female workers, it worsens the gender wage gap. Further, there is no strong evidence of cultural spillovers to skilled female workers. This may be explained by the fact that multinational enterprises choose to adopt local institutions in order to be successful in developing-country markets, thereby losing some of their ownership advantages.

Previous studies have argued that, relative to local firms, multinational firms may have an “outsider’s advantage” in hiring women. Using a large data set of executives in the countries of the Gulf Cooperation Council, in a region with some of the lowest rates of female labour force participation in the world, I present new evidence of a setting in which foreign firms do not capture opportunity in the local labour market. I find that foreign firms, on average, are not more likely than local firms to hire female executives and are less likely to place women into top management roles. I propose that foreign firms may have fewer social networks and resources, or lack “insider’s advantage”, relative to local firms for recruiting women into executive positions.

We study an often-overlooked factor behind gender inequality: globalization, in particular, foreign direct investment (FDI). Building on a growing literature that studies the impact of trade and FDI on gender inequality, we test whether foreign-owned firms exhibit a different gender wage gap (GWG) than firms with domestic ownership, using unique South African administrative matched employer-employee data. We find that the unconditional GWG is substantially smaller in foreign-owned firms than in firms with domestic ownership. We also find that for foreign-owned firms this difference is reversed once we control for a large set of fixed effects. In our preferred specification, foreign-owned firms have a larger GWG of about 2.4 percentage points. The share of women employed in foreign firms is lower than in firms with domestic ownership, in contrast to similar studies, which may indicate an underlying inequality in opportunities for women within a developing country context.

This paper studies foreign direct investment spillovers on the gender-related labour market practice of domestic firms, based on a unique firm-to-firm data set of Bangladesh’s textiles and garment sectors. The paper looks at the female employment of domestic firms that are directly and indirectly related to foreign- owned firms through supply chain linkages. These domestic firms are either the local suppliers or customers of foreign-owned firms, or they share local suppliers and customers with foreign-owned firms. The estimates show that domestic firms related to foreign-owned firms have significantly more female administrative workers, but not necessarily more female non-administrative workers, owing to the former participating in more firm-to-firm interactions.

This paper investigates how the interplay between foreign direct investment (FDI) and the availability of technology affects labour market outcomes for women in Viet Nam. Using household surveys, we explore the relationship between industrial exposure to FDI, access to technology, and employment and wages. We find that FDI is associated with increases in employment and wages by more in hightechnology areas of the country. In areas of the country with weak technology, foreign investment is associated with lower employment and lower wages, particularly for men. Together, these results highlight the importance of absorptive capacity; that is, to truly benefit from foreign investment, the domestic economy needs a sound education system and established technology. We also find that an equal increase in foreign investment in high-tech provinces is associated with larger increases in top wages for men than for women. In general, these results suggest that foreign investment may be associated with a rising gender wage gap at the high end of the wage distribution.

A long and well-established literature exists on the role of multinational enterprises (MNEs) in transferring technology around the globe, enhancing local productivity. However, we know very little about the impact of foreign direct investment (FDI) and multinational enterprises on gender policy and practice. In this research, we focus on the role of MNEs in potentially promoting female empowerment and gender equality in Brazil. First, the research performs a descriptive exercise on the gender composition and gender earnings gaps at MNEs versus domestic firms. Then, we ask whether workers moving from multinational to domestic firms can transfer information about gender practice, by exploring the relationship across domestic firms with various proportions of workers with previous experience in a multinational. Unfortunately, despite the many theoretical reasons to expect MNEs to support and transfer best practice in gender policy, these ideas are not borne out in the data. Multinational firms employ fewer women and exhibit higher gender earnings gaps than their domestic firm counterparts. For this reason, it is no surprise that domestic firms with high shares of former MNE workers are not different from domestic firms with fewer former MNE workers in terms of gender policy and practice. Our work emphasizes the need for domestic policy to enhance the status of women in the economy and the international community to support best practice in gender policy across all types of firms.

Government policy and private sector practice have the ability to spread gender equality, which can have an impact on growth and development. Over the past years, an upsurge has been observed in trade agreements that carve out space for gender issues in their agendas. The same is not true for international investment treaties. Foreign direct investment inflows can lead to more opportunities for women in the job market but may also exacerbate disparities. This paper aims to address and compare the role and effect of gender provisions in trade and investment agreements, and to shed light on additional policies that may be needed to ensure that governments and multinational enterprises address gender constraints.

This paper constructs and analyses a set of novel indicators on gender equality in the business sector, which focus on multinational enterprises and foreign traders in Finland. The descriptive analysis reveals large differences in the share of women and men employed in the best paying professions, especially in multinationals. Dynamic analysis shows that foreign investment typically results in pay increases for males, while this is not true for women. These disparities are strongest among managers and professionals working in the most profitable firms. A blueprint is provided for linking business statistics and social statistics to enable analyses of gender inequalities in the labour market.