Multinational production with non-neutral technologies

Chang Sun

Journal of International Economics, 2020, vol. 123, issue C

Abstract: This paper develops a quantitative model of multinational production (MP) with non-neutral technologies incorporating two stylized facts observed in a global firm-level data: first, larger firms on average use more capital-intensive technologies; second, among firms producing in the same industry and country, those from more capital-abundant home countries use more capital-intensive technologies. I quantify the model using both firm-level and aggregate moments for 37 countries. I found that the reduction in MP costs accounts for 56% of the average decline in labor shares from 1996 to 2011, and the model also replicates a negative relationship between the change in a country's labor share and the change in the foreign affiliates' output share as observed in the data.

Keywords: Multinational production; Non-neutral technologies; Labor shares (search for similar items in EconPapers)
JEL-codes: F1 F4 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:123:y:2020:i:c:s0022199620300131

DOI: 10.1016/j.jinteco.2020.103294

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