Becker, B, Driffield, N, Lancheros, S orcid.org/0000-0001-8020-764X et al. (1 more author) (2020) FDI in hot labour markets: The implications of the war for talent. Journal of International Business Policy, 3 (2). pp. 107-133. ISSN 2522-0691
Abstract
This paper highlights an inherent contradiction that exists within investment promotion activities in rich countries. Since the financial crisis, many inward investment agencies have shifted their activities from job creation per se to seeking to attract investment in high-tech activities. Such knowledge-intensive sectors are engaged in what has become referred to as “the war for talent”, so locations need to understand their value proposition to firms, especially where labour is tight. This paper explores the implications of this, in terms of the impact on employment and earnings of high skilled labour. We show that, because skill shortages already exist in many of these sectors, seeking to attract inward investment in these sectors simply causes the earnings of such workers to be bid up, and employment in the incumbent sector to fall. We highlight the over-riding importance that firms place on the availability of skilled labour when determining locations, and how policies which promote labour market flexibility, particularly through investment in skills to address skill shortages, can significantly mitigate the adverse effects, which tend to be more keenly felt in poorer regions of Europe where skilled labour is in even shorter supply.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2020 The Author(s). This is an open access article under the terms of the Creative Commons Attribution License (CC-BY 4.0), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | inward investment, labour market flexibility, knowledge spillover |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Economics Division (LUBS) (Leeds) The University of Leeds > Faculty of Business (Leeds) > International Business Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 20 Mar 2020 14:30 |
Last Modified: | 23 Feb 2023 15:48 |
Status: | Published |
Publisher: | Palgrave Macmillan |
Identification Number: | 10.1057/s42214-020-00052-y |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:158607 |