The Effect of Multinational Firms' Operations on Their Domestic Employment
Given the level of its production in the U.S., a firm that produces more abroad tends to have fewer employees in the U.S. and to pay slightly higher salaries and wages to them. The most likely explanation seems to be that the larger a firm's foreign production, the greater its ability to allocate the more labor-intensive and less skill-intensive portions of its activity to locations outside the United States. This relationship is stronger among manufacturing firms than among service industry firms, probably because services are less tradable than manufactured goods or components, and service industries may therefore be less able to break up the production process to take advantage of differences in factor prices.
|Date of creation:||Nov 1988|
|Date of revision:|
|Publication status:||published as "Parent Firms and their Foreign Subsidiaries in Goods and Service Indudtries." International trade and Finance Association, 1991, Proceedings, pp. 207-222.|
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- Lipsey, Robert E & Weiss, Merle Yahr, 1984. "Foreign Production and Exports of Individual Firms," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 304-08, May.
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NBER Working Papers
2390, National Bureau of Economic Research, Inc.
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"Interactions between domestic and foreign investment,"
International Finance Discussion Papers
329, Board of Governors of the Federal Reserve System (U.S.).
- Stevens, Guy V. G. & Lipsey, Robert E., 1992. "Interactions between domestic and foreign investment," Journal of International Money and Finance, Elsevier, vol. 11(1), pages 40-62, February.
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- Irving B. Kravis & Robert E. Lipsey, 1988. "Production and Trade in Services by U.S. Multinational Firms," NBER Working Papers 2615, National Bureau of Economic Research, Inc.
- Robert E. Lipsey & Irving Kravis, 1982.
"Do Multinational Firms Adapt Factor Proportions to Relative Factor Prices?,"
in: Trade and Employment in Developing Countries, Volume 2: Factor Supply and Substitution, pages 215-256
National Bureau of Economic Research, Inc.
- Robert E. Lipsey & Irving B. Kravis & Romualdo A. Roldan, 1978. "Do Multinational Firms Adapt Factor Proportions To Relative Factor Prices?," NBER Working Papers 0293, National Bureau of Economic Research, Inc.
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