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Margins of multinational labor substitution
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Muendler, Marc-Andreas and Becker, Sascha O. (2010) Margins of multinational labor substitution. American Economic Review, Vol.100 (No.5). pp. 1999-2030. doi:10.1257/aer.100.5.1999
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Official URL: http://dx.doi.org/10.1257/aer.100.5.1999
Abstract
Employment at a multinational enterprise (MNE) responds to wages at the extensive margin, when an MNE enters a foreign location, and at the intensive margin, when an MNE operates existing affiliates. We present an MNE model and conditions for parametric and nonparametric identification. Prior studies rarely found wages to affect MNE employment. Our integrated approach documents salient labor substitution for German manufacturing MNEs and removes bias. In Central and Eastern Europe, most employment responds at the extensive margin, while in Western Europe the extensive margin accounts for around two-thirds of employment shifts. At distant locations, MNEs respond to wages only at the extensive margin. (JEL F23, J23, J31, R32)
| Item Type: | Journal Article | ||||
|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HC Economic History and Conditions | ||||
| Divisions: | Faculty of Social Sciences > Economics | ||||
| Journal or Publication Title: | American Economic Review | ||||
| Publisher: | American Economic Association | ||||
| ISSN: | 0002-8282 | ||||
| Official Date: | December 2010 | ||||
| Dates: |
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| Volume: | Vol.100 | ||||
| Number: | No.5 | ||||
| Number of Pages: | 32 | ||||
| Page Range: | pp. 1999-2030 | ||||
| DOI: | 10.1257/aer.100.5.1999 | ||||
| Status: | Peer Reviewed | ||||
| Publication Status: | Published | ||||
| Access rights to Published version: | Restricted or Subscription Access |
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