Direct employment in multinational enterprises: Trends and implications, MULTI Working Paper No. 101

The globalization of international production has taken on a new meaning within the last two decades. The apprehension and scepticism to the entry of foreign enterprises, which characterized the views of many policy-makers in the 1970s, has been replaced, on one hand, with more favourable views, but has led to a fear of incentives-based competition between countries. At the same time, the advance in technology andcommunications has enabled once oblivious consumers to become more aware of theproductive nature of the outputs of multinational enterprises (MNEs). The proliferation ofglobal production networks that allow firms to produce segments of their production invarious locations at low cost has enabled some of them to successfully leverage foreigndirect investment (FDI) for development, but for others only confirms that MNEs exportjobs abroad and exploit workers in developing countries.At the core of these developments is the issue of employment, whether at home orabroad. The international integration of production implies creation, displacement and/ormigration of jobs. While these developments are not new, the 1990s was a period ofparticularly rapid developments. This paper aims to examine the recent trends from along-term perspective, and by utilizing both financial and employment data, provide astatic as well as dynamic picture of the ation of global productionundertaken by MNEs.