Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/69368
Authors: 
Godart, Olivier N.
Görg, Holger
Greenaway, David
Year of Publication: 
2012
Series/Report no.: 
Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit 7061
Abstract: 
Using information on a panel of multinational firms operating in the United Kingdom from 1996 to 2005, we find that labour demand in domestic multinationals is less sensitive to labour cost changes than in foreign multinationals. This difference in the wage elasticity of labour demand persists even when we control for the skill intensity of firms or their level of intangible assets. This is in line with an interpretation that the provision of headquarter services in domestic multinational firms protects against strong fluctuations in labour demand. Overall, our results suggest that the wage elasticity of labour demand is about 40 percent lower in domestic than in foreign multinationals.
Subjects: 
labour demand elasticity
multinational firms
headquarter services
skill intensity
JEL: 
F23
J23
J24
Document Type: 
Working Paper

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