Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/17798
Authors: 
Muendler, Marc-Andreas
Jäckle, Robert
Ekholm, Karolina
Becker, Sascha O.
Year of Publication: 
2004
Series/Report no.: 
Kiel Working Paper 1243
Abstract: 
Using data for German and Swedish multinational enterprises (MNEs), this paper assesses international employment patterns. It analyzes determinants of location choice and the degree of substitutability of labor across locations. Countries with highly skilled labor forces attract German MNEs, but we find no such evidence for Swedish MNEs. This is consistent with the hypothesis that German MNEs locate production stages intensive in high-skilled labor abroad. In MNEs from either country, affiliate employment tends to substitute for employment at the parent firm. At the margin, substitutability is the strongest with respect to affiliate employment in Western Europe. A one percent larger wage gap between Germany and locations in Central and Eastern Europe (CEE) is estimated to be associated with 900 fewer jobs in German parents and 5,000 more jobs in affiliates located in CEE. A one percent larger wage gap between Sweden and CEE is estimated to be associated with 140 fewer jobs in Swedish parents and 260 more jobs in affiliates located in CEE.
Subjects: 
Multinational enterprises ; location choice ; multinomial choice ; labor demand ; translog cost function
JEL: 
F21
J23
F23
J21
Document Type: 
Working Paper

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