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Title:Relocation, offshoring and labour market repercussions : the case of the German automobile industry in Central Europe PDF Logo
Authors:Nunnenkamp, Peter
Issue Date:2006
Citation:[Editor:] Snower, Dennis J. [Editor:] Arbeitsgemeinschaft Deutscher Wirtschaftswissenschaftlicher Forschungsinstitute [Title:] The effects of globalization on national labor markets : diagnosis and therapy ; [contributions to the 69th annual meeting of the Association of German Economic Research Institutes (ARGE-Institute), which took place in Berlin on April 27, 2006] [Place:] Berlin [Publisher:] Duncker & Humblot [ISBN:] 978-3-428-12299-8 [Series:] Applied economics quarterly / Supplement [No.:] 57
Abstract:The paper raises the proposition that Central Europe?s integration into the international division of labour has added significantly to competitive pressure in the German automobile industry. Based on production and trade data, we trace two dimensions of competitive pressure: relocation of assembly operations and offshoring of automotive parts production. The knowledge-capital model of multinational enterprises provides the analytical basis for the discussion of labour market repercussions. Vertical foreign direct investment in Central Europe may have helped the relatively favourable employment and earnings record of the German automobile industry, compared to other manufacturing industries. Yet recent industrial disputes can be attributed, though not exclusively, to the emergence of Central Europe as an attractive location for assembly operations and autoparts production. Employment and wages diverged considerably within the German automobile industry. Relative to skilled workers, the labour market situation of less skilled workers deteriorated significantly.
Subjects:vertical FDI , trade in intermediates , relative wages , employment
JEL:L62
F23
F14
Document Type:Conference Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW

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