Multinationals do not export jobs, and other related results

Kwok Tong Soo ()

No 244952396, Working Papers from Lancaster University Management School, Economics Department

Abstract: We develop a simple model of multinational firms, in which firms engage in production abroad to take advantage of cheap labour. There are gains from multinational firms beyond the standard gains from trade. The model makes two empirically testable predictions. First, firms with more foreign employment also have more domestic employment; multinationals are not net exporters of jobs. Second, the expansion of multinational activity will increase the overall size of the firm. We find that both predictions hold empirically, using a sample of the largest multinational firms. In addition, the presence of multinational firms raises welfare relative to when they are absent, although the proportional gain is not large.

Keywords: Multinational firms; comparative advantage (search for similar items in EconPapers)
JEL-codes: F12 F23 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-bec and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:lan:wpaper:244952396

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