Swedish Multinationals and Competition from High- and Low-Wage Locations

Henrik Braconier and Karolina Ekholm ()

No 2323, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This study uses data on Swedish multinationals to estimate cross elasticities of labour demand in different locations. With a vertical decomposition of the firm's activities, whether there is substitution or complementarity between employment in different parts of the firm will depend on whether wage changes lead to a relocation of activities or simply to changes in marginal costs and/or demand for inputs in other parts of the firms. We find that there is some evidence of a substitutionary relationship between employment in the Swedish parts of the firms and employment in other high-income locations, but we do not find any evidence of substitution stemming from employment in low-income locations. We find mainly a relationship of complementarity between employment in different affiliates.

Keywords: Labour Demand; Multinational Firms; Vertically Integrated Firms (search for similar items in EconPapers)
JEL-codes: F23 J23 (search for similar items in EconPapers)
Date: 1999-12
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Swedish Multinationals and Competition from High‐ and Low‐Wage Locations (2000)
Working Paper: Swedish Multinationals and Competition from High- and Low-Wage Locations (1999)
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