Domestic multinationals, foreign affiliates, and labour demand elasticities

Arbeitspapier

Using information on a panel of multinational firms operating in the United Kingdom from 1996 to 2005, we find that labour demand in domestic multinationals is less sensitive to labour cost changes than in foreign multinationals. This difference in the wage elasticity of labour demand persists even when we control for the skill intensity of firms or their level of intangible assets. This is in line with an interpretation that the provision of headquarter services in domestic multinational firms protects against strong fluctuations in labour demand. Overall, our results suggest that the wage elasticity of labour demand is about 40 percent lower in domestic than in foreign multinationals.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 7061

Classification and Topics

• Classification: Wirtschaft ; Multinational Firms; International Business ; Labor Demand ; Human Capital; Skills; Occupational Choice; Labor Productivity
• Subject: labour demand elasticity ; multinational firms ; headquarter services ; skill intensity ; Multinationales Unternehmen ; Arbeitsnachfrage ; Lohn ; Preiselastizität ; Unternehmenszentrale ; Schätzung ; Großbritannien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Godart, Olivier N. ; Görg, Holger ; Greenaway, David
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/69368
• Last update: 10.03.2025, 11:42 AM CET