Decomposing value chains within Swedish multinationals

Kent Eliasson (), Pär Hansson () and Markus Lindvert ()
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Kent Eliasson: Growth Analysis, Postal: Growth Analysis, Studentplan 3, SE-831 40 Östersund, Sweden, , Department of Economics, Umeå University, SE-901 87 Umeå, Sweden
Pär Hansson: Örebro University School of Business, Postal: Örebro University, School of Business, SE - 701 82 ÖREBRO, Sweden, https://www.oru.se/personal/par_hansson
Markus Lindvert: Growth Analysis, Postal: Growth Analysis, Studentplan 3, SE-831 40 Östersund, Sweden

No 2018:9, Working Papers from Örebro University, School of Business

Abstract: Multinational enterprises (MNE) have been highly instrumental in the processes leading to the increased fragmentation of production within global value chains. We examine the relationship between relative demands for skills, non-routine or non-offshorable tasks in Swedish MNE parents (onshore) and their employment shares in affiliates abroad (offshore), as well as the impact on relative demand in Swedish enterprises at home when establishing an affiliate abroad. The period of study is 2001 to 2013, a period of expansion for Swedish MNEs, particularly in low-income countries such as China. Our instrumental variable estimates suggest that there is a causal relationship of increased employment shares in affiliates abroad (offshore) on higher relative demand for skills and non-routine tasks in the parents at home (onshore) and that the impact of such offshore employment changes onshore is non-negligible. Furthermore, we estimate the relationships between absolute employment onshore (skilled and less-skilled labor) and employment in affiliates offshore (high- and low-income countries). Increased employment in affiliates in lowincome countries is negatively related to the employment of less-skilled workers in manufacturing MNE parents (substitute), whereas increased employment in affiliates in high-income countries is positively related to the employment of both skilled and lessskilled workers in service at MNE parents (complement).

Keywords: multinational enterprises; relative labor demand; offshoring; skill upgrading; non-routine; offshorable tasks (search for similar items in EconPapers)
JEL-codes: F14 F16 F23 J23 J24 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2018-06-12
New Economics Papers: this item is included in nep-int and nep-lma
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:oruesi:2018_009

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