Margins of multinational labor substitution
By: by Marc-Andreas Muendler, Sascha O. Becker
Contributors: Becker, Sascha O.
Series: Discussion paper -- no. 2131; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) -- no. 2131
Publisher: IZA
Published: 2006
Place of publication: Bonn, Germany
Language: eng
Format: [electronic resource] /
Subjects: International business enterprises; Wage differentials; International Competition
Description: "Multinational labor demand responds to wage differentials at the extensive margin, when a multinational enterprise (MNE) expands into foreign locations, and at the intensive margin, when an MNE operates existing affiliates across locations. We derive conditions for parametric and nonparametric identification of an MNE model to infer elasticities of labor substitution at both margins, controlling for location selectivity. Prior studies have rarely found foreign wages or operations to affect employment. Our strategy detects salient adjustments at the extensive margin for German MNEs. With every percentage increase in German wages, German MNEs allocate 2,000 manufacturing jobs to Eastern Europe at the extensive margin and 4,000 jobs overall"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Title from PDF file as viewed on 5/19/2006.

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