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Relocation, offshoring and labour market repercussions : the case of the German automobile industry in Central Europe

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Author Info

  • Nunnenkamp, Peter

Abstract

The paper raises the proposition that Central Europe?s integration into the international division of labour has added significantly to competitive pressure in the German automobile industry. Based on production and trade data, we trace two dimensions of competitive pressure: relocation of assembly operations and offshoring of automotive parts production. The knowledge-capital model of multinational enterprises provides the analytical basis for the discussion of labour market repercussions. Vertical foreign direct investment in Central Europe may have helped the relatively favourable employment and earnings record of the German automobile industry, compared to other manufacturing industries. Yet recent industrial disputes can be attributed, though not exclusively, to the emergence of Central Europe as an attractive location for assembly operations and autoparts production. Employment and wages diverged considerably within the German automobile industry. Relative to skilled workers, the labour market situation of less skilled workers deteriorated significantly.

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File URL: http://www.econstor.eu/bitstream/10419/3910/1/Nu-ARGE_AutomobileIndustry.pdf
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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Open Access publications from Kiel Institute for the World Economy with number info:hdl:10419/3910.

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Date of creation: 2006
Date of revision:
Handle: RePEc:ner:ifwkie:info:hdl:10419/3910

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Web page: http://www.ifw-kiel.de

Related research

Keywords: Direktinvestition; Kraftfahrzeugindustrie; Auslandsproduktion; Deutsch; Kraftfahrzeugzulieferer; Offshoring; Lieferanten-Kunden-Beziehung; Lohnstruktur; Qualifikation; Deutschland; Osteuropa;

References

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  1. Blomström, Magnus & Fors, Gunnar & Lipsey, Robert E., 1997. "Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden," Working Paper Series 490, Research Institute of Industrial Economics.
  2. Sascha O. Becker & Karolina Ekholm & Robert Jäckle & Marc-Andreas Mündler, 2005. "Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals," Kiel Working Papers 1243, Kiel Institute for the World Economy.
  3. Melanie Lansbury & Nigel Pain & Katerina Smidkova, 1996. "Foreign Direct Investment in Central Europe Since 1990: An Econometric Study," National Institute Economic Review, National Institute of Economic and Social Research, vol. 156(1), pages 104-114, May.
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  16. Stefano Federico & Gaetano Alfredo Minerva, 2005. "Fear of Relocation? Assessing the Impact of Italy’s FDI on Local Employment," Working Papers 102, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
  17. Durkan, Joe, 1984. "The National Plan," Open Access publications from University College Dublin urn:hdl:10197/1073, University College Dublin.
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Cited by:
  1. Mühlen, Henning & Görg, Holger & Nunnenkamp, Peter, 2010. "Firm Heterogeneity, Industry Characteristics and Types of FDI: The Case of German FDI in the Czech Republic," Open Access publications from Kiel Institute for the World Economy D4-V2, Kiel Institute for the World Economy.

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