Foreign firms in core or peripheral areas? The spatial dimension of job creation and wages in Sub-Saharan Africa

This paper investigates the within-country location choices of a large sample of foreign and domestic firms in 19 Sub-Saharan African countries. We show that foreign firms are more likely to locate in core regions compared to domestic ones but generate significantly more jobs per productive unit in the periphery. We find some evidence that foreign firms generate relatively better jobs in peripheral areas: more skill intensive and better paid. These results highlight a fundamental role that FDI in peripheral areas might play in rebalancing the spatial distribution of economic opportunities in developing countries where highly congested megacities exercise a strong centripetal force.