Foreign entry in the services sector and gender workforce composition

ABSTRACT The services sector and multinational corporations have played an increasingly essential role in promoting gender equality and women’s empowerment in labour markets. This paper examines whether the entry of foreign firms into the services sector can affect the gender workforce composition of their domestic counterparts, and to what extent. The empirical analyses utilise a large panel dataset of firms in the labour-abundant economy of Vietnam. The data show a higher proportion of women employed in foreign firms than local ones across two-digit industries and regions. The estimations indicate that foreign entry induces domestic firms to hire women more intensively. Large, state-owned and less capital-intensive firms tend to employ men at a higher rate. Further analyses reveal divergent effects of foreign affiliates. While increased foreign entry strongly stimulates the hiring of women among local firms in male-intensive industries, it exerts an insignificant impact on gender workforce composition in the female-intensive group.