Exporting, FDI, and Labour Demand Adjustment: Evidence from the UK Manufacturing

Q Li and Sourafel Girma
Authors registered in the RePEc Author Service: Qian Cher Li () and Qi Li

Working Papers from Business School - Economics, University of Glasgow

Abstract: This paper documents evidence of differential speed of labour demand adjustment among exporters, foreign multinationals (henceforth MNEs) and domestic non-exporting firms from the UK manufacturing industry. Our findings show that MNEs exhibit the fastest speed of employment adjustment to its optimal level, followed by exporters and then domestic non-exporters. Interestingly, the long-run adjustment of labour demand with respect to factor price and demand shocks is less pronounced amongst MNEs and exporters, consistent with the view that firms engaged in international commerce activities generate more skilled jobs that are more costly to dispose of. Moreover, exporting intensity also seems to matter; MNEs with limited export-market commitment are found to have more rigid labour adjustment in response to output and wages shocks in the long run. These findings may allay fears on the footloose nature of MNEs in the sense that jobs in MNEs (followed by exporters) are expected to be more secure on average in response to any shocks affecting long-run labour demand.

Keywords: foreign direct investment (FDI); exports; employment adjustment (search for similar items in EconPapers)
JEL-codes: F16 F23 J23 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.gla.ac.uk/media/media_22187_en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gla:glaewp:2006_18

Access Statistics for this paper

More papers in Working Papers from Business School - Economics, University of Glasgow Contact information at EDIRC.
Bibliographic data for series maintained by Business School Research Team ().