Multinational Companies, Backward Linkages and Labour Demand Elasticities
AbstractThis paper investigates the link between nationality of ownership and wage elasticities of labour demand at the level of the plant. In particular, we examine whether labour demand in multinationals becomes less elastic with respect to the wage if the plant has backward linkages with the local economy. Our empirical evidence, based on a rich plant level dataset, shows that the extent of local linkages indeed generally reduces the wage elasticity of labour demand. This result is economically important and holds for a number of different specifications.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2506.
Length: 32 pages
Date of creation: Dec 2006
Date of revision:
Publication status: published in: Canadian Journal of Economics / Revue canadienne d'économique, 2009, 42( 1), 332-348
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Other versions of this item:
- Holger Görg & Michael Henry & Eric Strobl & Frank Walsh, 2009. "Multinational companies, backward linkages, and labour demand elasticities," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 332-348, February.
- Holger Görg & Michael Henry & Eric Strobl & Frank Walsh, 2006. "Multinational Companies, Backward Linkages and Labour Demand Elasticities," Working Papers 200628, School Of Economics, University College Dublin.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
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