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Multinational production with non-neutral technologies

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  • Sun, Chang

Abstract

This paper develops a quantitative model of multinational production (MP) with non-neutral technologies incorporating two stylized facts observed in a global firm-level data: first, larger firms on average use more capital-intensive technologies; second, among firms producing in the same industry and country, those from more capital-abundant home countries use more capital-intensive technologies. I quantify the model using both firm-level and aggregate moments for 37 countries. I found that the reduction in MP costs accounts for 56% of the average decline in labor shares from 1996 to 2011, and the model also replicates a negative relationship between the change in a country's labor share and the change in the foreign affiliates' output share as observed in the data.

Suggested Citation

  • Sun, Chang, 2020. "Multinational production with non-neutral technologies," Journal of International Economics, Elsevier, vol. 123(C).
    • Handle: RePEc:eee:inecon:v:123:y:2020:i:c:s0022199620300131
    DOI: 10.1016/j.jinteco.2020.103294
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    2. Leone, Fabrizio, 2021. "Foreign Ownership and Robot Adoption," CEPREMAP Working Papers (Docweb) 2111, CEPREMAP.
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    More about this item

    Keywords

    Multinational production; Non-neutral technologies; Labor shares;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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