German Foreign Direct Investment and Wages

Arbeitspapier

Over the last decade, German multinationals created about two million jobs abroad with increasing foreign direct investment (FDI). While there are many reasons for firms to go multinational and probably just as many for Germany's high unemployment, this paper aims to investigate the relationship between domestic labour costs and foreign direct investment. We apply a theoretical model for an econometric analysis examining the determinants of FDI using panel data of German firms' foreign capital stocks in 22 countries between 1994 and 2003. Estimating elasticities, we find that while domestic wages do not significantly influence total FDI by German firms, they positively affect the FDI stock in countries where cheap labour is abundant. Thus, although Germany's high labour costs are not the sole driver of foreign direct investment, they may accelerate the outsourcing of German jobs.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Dresden Discussion Paper Series in Economics ; No. 10/07

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Multinational Firms; International Business ; International Investment; Long-term Capital Movements ; Trade and Labor Market Interactions
• Thema: Foreign direct investment ; wages ; trade ; German multinational firms ; Direktinvestition ; Auslandsproduktion ; Lohn ; Arbeitskosten ; Schätzung ; Deutschland

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Lochner, Stefan ; Broll, Udo
• Ereignis: Veröffentlichung
• (wer): Technische Universität Dresden, Fakultät Wirtschaftswissenschaften
• (wo): Dresden
• (wann): 2007

Weitere Informationen

• Handle: http://hdl.handle.net/10419/22751
• Letzte Aktualisierung: 10.03.2025, 11:46 MEZ