Factor Prices and Factor Substitution in U.S. Firms' Manufacturing Affiliates Abroad
AbstractUsing confidential individual firm data from the Bureau of Economic Analysis survey of U.S. firms' manufacturing operations abroad, we investigate the determinants of capital intensity in affiliate operations. Host country labor cost, the scale of host country production, and the capital intensity of the parent firm's production in the United States, are all significant influences. The parent's capital intensity is the strongest and most consistent determinant of affiliate capital intensity. Affiliates that export are more sensitive to these factors in their choice of factor proportions than affiliates that sell only in their host countries.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10442.
Date of creation: Apr 2004
Date of revision:
Publication status: published as Maria Borga & Robert E. Lipsey, 2009. "Factor Prices, Factor Substitution and Exporting in US Manufacturing Affiliates Abroad," The World Economy, Blackwell Publishing, vol. 32(1), pages 30-48, 01.
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Find related papers by JEL classification:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-06-07 (All new papers)
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