Multinationals, skills, and wage elasticities

Research output: Contribution to journalArticle

Abstract

The increase in foreign direct investments raises concerns about labor market consequences in many countries. It is feared that multinational firms are inclined to shift jobs abroad and increase job volatility. We use firm-level data to examine if multinationality and foreign ownership affect the wage elasticity of labor demand. Unlike previous studies, we distinguish the effect on different skill groups of employees. We find no general difference in wage elasticity between foreign and domestic firms but the wage elasticity is higher in multinational firms than in national firms, in particular for medium-skilled workers.

Details

Authors
External organisations
  • Government Institute for Economic Research
  • Aalto University
  • Research Institute of Industrial Economics
  • Örebro University
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics

Keywords

  • cross-border acquisitions, multinational enterprises, foreign ownership, labor demand, skill groups, J23, F16, F21, F23
Original languageEnglish
Pages (from-to)263-280
Number of pages18
JournalReview of World Economics
Volume146
Issue number2
Publication statusPublished - 2010
Publication categoryResearch
Peer-reviewedYes
Externally publishedYes