Can multinational firms promote gender equality? The role of labour mobility

Abstract

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.