Location choice and employment decisions : a comparison of German and Swedish multinationals

Arbeitspapier

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. On 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1374

Classification and Topics

• Classification: Wirtschaft ; Multinational Firms; International Business ; Labor Demand ; International Investment; Long-term Capital Movements ; Labor Force and Employment, Size, and Structure
• Subject: multinational enterprises ; location choice ; multinomial choice ; labor demand ; translog cost function ; Multinationales Unternehmen ; Standortwahl ; Arbeitsnachfrage ; Arbeitskosten ; Vergleich ; Schweden ; Deutschland

Contributors, Location and Time

• Event: Geistige Schöpfung
• (who): Becker, Sascha ; Ekholm, Karolina ; Jaeckle, Robert ; Muendler, Marc-Andreas
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/18738
• Last update: 20.09.2024, 8:25 AM CEST