Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals

Arbeitspapier

Using data on German and Swedish multinational enterprises (MNEs), this paper analyzes determinants ofinternational location choice and the degree of substitutability of labor across locations. Countries with highly skilled labor forces strongly attract German but not necessarily Swedish MNEs. In MNEs fromeither country, affiliate employment tends to substitute for employment at the parent firm. At the margin, substitutability is the strongest with respect to affiliate employment in Western Europe. A one percentlarger wage gap between Germany and locations in Central and Eastern Europe (CEE) is associated with 900 fewer jobs at German parents and 5,000 more jobs at affiliates in CEE. A one percent larger wage gap between Sweden and CEE is associated with 140 fewer jobs at Swedish parents and 260 more jobs at affiliates in CEE.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ifo Working Paper ; No. 4

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Multinational Firms; International Business ; Labor Force and Employment, Size, and Structure ; Labor Demand
• Subject: Multinational enterprises ; location choice ; multinomial choice ; labor demand ; translog cost function

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Becker, Sascha O. ; Ekholm, Karolina ; Jäckle, Robert ; Muendler, Marc-Andreas
• Event: Veröffentlichung
• (who): ifo Institute - Leibniz Institute for Economic Research at the University of Munich
• (where): Munich
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/73786
• Last update: 10.03.2025, 11:44 AM CET