Production transfer within multinational enterprises and American wages

This paper tests whether the transfer of production stages within US-headquartered multinational enterprises (MNEs) from US parents to foreign affiliates has contributed to within-industry shifts in US relative labor demand toward the more-skilled. There are two main empirical results. First, there...

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Bibliographic Details
Published in:Journal of international economics 2000-04, Vol.50 (2), p.449-472
Main Author: Slaughter, Matthew J
Format: Article
Language:English
Subjects:
Econometrics
Labor economics
Labour demand
Multinational corporations
Multinational enterprises
Production
Regression analysis
Skill upgrading
Skills
Studies
U.S.A
Wage differential
Wage inequality
Wage structure
Wages
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Summary:This paper tests whether the transfer of production stages within US-headquartered multinational enterprises (MNEs) from US parents to foreign affiliates has contributed to within-industry shifts in US relative labor demand toward the more-skilled. There are two main empirical results. First, there is evidence of MNE transfer during the past 20 years. Second, regression analysis does not support the MNE hypothesis. MNE transfer tends to have small, imprecisely estimated effects on US relative labor demand. This finding is inconsistent with models of MNEs in which affiliate activities substitute for parent unskilled-labor-intensive activities.
ISSN:0022-1996
1873-0353
DOI:10.1016/S0022-1996(98)00081-6