Labor-related knowledge transfers from Chinese foreign direct investment in Ethiopia and Tanzania

IFPRI Discussion Paper 2078

27 Pages Posted: 5 Jan 2022

See all articles by Margaret McMillan

Margaret McMillan

Tufts University - Department of Economics; International Food Policy Research Institute (IFPRI); National Bureau of Economic Research (NBER)

Mia Ellis

International Food Policy Research Institute (IFPRI)

Manali Sovani

Tufts University’s EPP Program

Date Written: December 28, 2021

Abstract

We examine worker training by Chinese manufacturing firms using nationally representative firm-level data from both Ethiopia and Tanzania. While Chinese firms make up a relatively small portion of the manufacturing industry in both Ethiopia and Tanzania, at the firm-level they contribute significantly to both domestic employment and labor training. In both countries more than 85 percent of the workers employed by Chinese firms are local, and Chinese firms (and other foreign firms) are more likely to offer labor training than their domestic counterparts. However, we find evidence that Chinese firms underperform relative to other foreign firms in the share of local workers employed, and in Tanzania the difference is especially large for managerial positions.

Keywords: ETHIOPIA, EAST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA, TANZANIA, labour, training, knowledge, investment, manufacturing, foreign investment, Foreign Direct Investment (FDI), Chinese FDI, labour training, local employment

Suggested Citation

McMillan, Margaret and Ellis, Mia and Sovani, Manali, Labor-related knowledge transfers from Chinese foreign direct investment in Ethiopia and Tanzania (December 28, 2021). IFPRI Discussion Paper 2078, Available at SSRN: https://ssrn.com/abstract=4000640

Margaret McMillan (Contact Author)

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Mia Ellis

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Manali Sovani

Tufts University’s EPP Program ( email )

Medford, MA 02155
United States

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