Multinational companies, backward linkages, and labour demand elasticities
This 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 does indeed generally reduce the wage elasticity of labour demand. This result is economically important and holds for a number of different specifications.
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Volume (Year): 42 (2009)
Issue (Month): 1 (February)
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- Holger Görg & Frances Ruane, 2000. "An Analysis of Backward Linkages in the Irish Electronics Sector," The Economic and Social Review, Economic and Social Studies, vol. 31(3), pages 215-235.
- Manuel Arellano & Stephen Bond, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
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