Multinationals, Offshoring and the Decline of U.S. Manufacturing

Christoph Boehm, Aaron Flaaen and Nitya Pandalai-Nayar

No 25824, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We provide new facts about the role of multinationals in the decline in U.S. manufacturing employment between 1993-2011, using a novel microdata panel with firm-level ownership and trade information. Multinational-owned establishments displayed lower employment growth than a narrow control group and accounted for 41% of the aggregate manufacturing employment decline. Further, newly multinational establishments in the U.S. experienced job losses, while their parent firms increased input imports from abroad. We develop a model that rationalizes this behavior and bound a key elasticity with our microdata. The estimates imply that a reduction in the costs of foreign sourcing leads firms to increase imports of intermediates and to reduce U.S. manufacturing employment. Our findings suggest that offshoring by multinationals was a key driver of the observed decline in manufacturing employment.

JEL-codes: F14 F16 F23 F4 F6 (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-bec, nep-ind and nep-int
Note: EFG IFM ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published as Christoph E. Boehm & Aaron Flaaen & Nitya Pandalai-Nayar, 2020. "Multinationals, Offshoring, and the Decline of U.S. Manufacturing," Journal of International Economics, vol 127.

Downloads: (external link)
http://www.nber.org/papers/w25824.pdf (application/pdf)

Related works:
Journal Article: Multinationals, Offshoring, and the Decline of U.S. Manufacturing (2020)
Working Paper: Multinationals Offshoring, and the Decline of U.S. Manufacturing (2017)
Working Paper: Multinationals, Offshoring and the Decline of U.S. Manufacturing (2016)
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:nbr:nberwo:25824

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25824

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().