Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/3910
Authors: 
Nunnenkamp, Peter
Year of Publication: 
2006
Citation: 
[Editor:] Snower, Dennis J. [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) [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

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