IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwkwp/1093.html
   My bibliography  Save this paper

Globalization of the automobile industry: traditional locations under pressure?

Author

Listed:
  • Spatz, Julius
  • Nunnenkamp, Peter

Abstract

Even though the automobile industry is technologically advanced, the increasing integration of low-income countries into the global division of labor has put competitive pressure on traditional automobile producing countries. New end-producers emerged in Asia, Latin America as well as Southern and Central Europe. In addition, the automobile industries of Germany, Japan and the United States engaged in outsourcing of relatively labor intensive segments of the value chain, especially on a regional level. Our analysis of the labor market effects of these developments supports the predictions of trade models: Low-skilled workers and labor intensive subsectors of the automobile industry in traditional locations suffered deteriorating wage and employment prospects in the process of globalization. The adjustment to fiercer competition from below differed considerably between Germany, Japan and the United States. Economic restructuring was least pronounced in the US automobile industry, largely due to the resistance of trade unions. As a result, the employment record and the world-market performance of US automobile producers turned out to be poor compared to their German and Japanese counterparts.

Suggested Citation

  • Spatz, Julius & Nunnenkamp, Peter, 2002. "Globalization of the automobile industry: traditional locations under pressure?," Kiel Working Papers 1093, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1093
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/2693/1/kap1093.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Heitger, Bernhard & Schrader, Klaus & Stehn, Jürgen, 1999. "Handel, Technologie und Beschäftigung," Open Access Publications from Kiel Institute for the World Economy 2277, Kiel Institute for the World Economy (IfW Kiel).
    2. Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
    3. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 9(1), pages 58-73.
    4. Ballance, Robert H & Forstner, Helmut & Murray, Tracy, 1987. "Consistency Tests of Alternative Measures of Comparative Advantage," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 157-161, February.
    5. Robert C. Feenstra, 1996. "U.S. Imports, 1972-1994: Data and Concordances," NBER Working Papers 5515, National Bureau of Economic Research, Inc.
    6. Jörg-Peter Weiß, 2000. "Die deutsche Automobilindustrie im internationalen Wettbewerb," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 67(12), pages 168-173.
    7. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
    8. Neven, Damien, 1995. "Trade liberalisation with Eastern nations: Some distribution issues," European Economic Review, Elsevier, vol. 39(3-4), pages 622-632, April.
    9. Diehl, Markus, 2001. "International Trade in Intermediate Inputs: The Case of the Automobile Industry," Kiel Working Papers 1027, Kiel Institute for the World Economy (IfW Kiel).
    10. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-193.
    11. Nunnenkamp, Peter, 1998. "Die deutsche Automobilindustrie im Prozeß der Globalisierung," Open Access Publications from Kiel Institute for the World Economy 1790, Kiel Institute for the World Economy (IfW Kiel).
    12. Christian von Hischhausen & Jürgen Bitzer (ed.), 2000. "The Globalization of Industry and Innovation in Eastern Europe," Books, Edward Elgar Publishing, number 1976.
    13. Bent Dalum & Keld Laursen & Gert Villumsen, 1998. "Structural Change in OECD Export Specialisation Patterns: de-specialisation and 'stickiness'," International Review of Applied Economics, Taylor & Francis Journals, vol. 12(3), pages 423-443.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fertig, Michael, 2003. "The Impact of Economic Integration on Employment – An Assessment in the Context of EU Enlargement," IZA Discussion Papers 919, Institute of Labor Economics (IZA).
    2. Truett, Lila J. & Truett, Dale B., 2017. "The German motor vehicle industry: Costs and crisis," International Review of Economics & Finance, Elsevier, vol. 48(C), pages 49-55.
    3. Nunnenkamp, Peter & Spatz, Julius, 2002. "Determinants of FDI in Developing Countries: Has Globalization Changed the Rules of the Game?," Open Access Publications from Kiel Institute for the World Economy 2976, Kiel Institute for the World Economy (IfW Kiel).
    4. Nobuaki Hamaguchi & Silvio Miyazaki & Leonardo Correia, 2014. "State Space Application to Recent Automobile Sector Triangle Trade between Japan and Latin America," Discussion Paper Series DP2014-05, Research Institute for Economics & Business Administration, Kobe University.
    5. Jörg MAYER, 2004. "Industrialization In Developing Countries: Some Evidence From A New Economic Geography Perspective," UNCTAD Discussion Papers 174, United Nations Conference on Trade and Development.
    6. Cody, John,, 2015. "How labor manages productivity advances and crisis response : a comparative study of automotive manufacturing in Germany and the US," ILO Working Papers 994871573402676, International Labour Organization.
    7. TINA M. Lila J. Truett & TINA M. Dale B. Truett, 2013. "The German Motor Vehicle Industry: Costs and Crisis During the late 1980s and 1990s, Japanese expertise with their flexible and efficient motor vehicle manufacturing system posed a substantial challen," Working Papers 0001, College of Business, University of Texas at San Antonio.
    8. Judit Nagy & Zsófia Jámbor, 2018. "Competitiveness In Global Trade: The Case Of The Automobile Industry," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 63(218), pages 61-84, July – Se.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nunnenkamp, Peter, 2000. "Globalisierung der Automobilindustrie: neue Standorte auf dem Vormarsch, traditionelle Anbieter unter Druck?," Kiel Working Papers 1002, Kiel Institute for the World Economy (IfW Kiel).
    2. Gordeev, Roman, 2020. "Comparative advantages of Russian forest products on the global market," Forest Policy and Economics, Elsevier, vol. 119(C).
    3. Dumont, Michel, 2004. "The Impact of International Trade with Newly Industrialised Countries on the Wages and Employment of Low-Skilled and High-Skilled Workers in the European Union," Thesis Commons bmxag, Center for Open Science.
    4. Mine Zeynep Senses, 2006. "The Effects of Outsourcing on the Elasticity of Labor Demand," Working Papers 06-07, Center for Economic Studies, U.S. Census Bureau.
    5. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1169-1213.
    6. Magnani, Elisabetta & Prentice, David, 2003. "Did globalization reduce unionization? Evidence from US manufacturing," Labour Economics, Elsevier, vol. 10(6), pages 705-726, December.
    7. João Amador & Sónia Cabral & José Maria, 2011. "A Simple Cross-Country Index of Trade Specialization," Open Economies Review, Springer, vol. 22(3), pages 447-461, July.
    8. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
    9. Carl Davidson & Steven J. Matusz, 2005. "Trade and Turnover: Theory and Evidence," Review of International Economics, Wiley Blackwell, vol. 13(5), pages 861-880, November.
    10. Tri WIDODO, 2009. "Comparative Advantage: Theory, Empirical Measures And Case Studies," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 4, pages 57-82, November.
    11. Jonathan E. Haskel & Matthew J. Slaughter, 2003. "Have Falling Tariffs and Transportation Costs Raised US Wage Inequality?," Review of International Economics, Wiley Blackwell, vol. 11(4), pages 630-650, September.
    12. Rigoberto A. Lopez & Xenia Matschke, 2006. "Food Protection for Sale," Review of International Economics, Wiley Blackwell, vol. 14(3), pages 380-391, August.
    13. Giacomo A. M. Ponzetto & Maria Petrova & Ruben Enikolopov, 2008. "The Dracula effect: voter information and trade policy," Economics Working Papers 1296, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2020.
    14. Rigoberto A. Lopez & Elena Lopez, 2003. "The impact of imports on price-cost margins: An empirical illustration," Empirical Economics, Springer, vol. 28(2), pages 403-416, April.
    15. Gordon H. Hanson & Kenneth Scheve & Matthew J. Slaughter, 2007. "Public Finance And Individual Preferences Over Globalization Strategies," Economics and Politics, Wiley Blackwell, vol. 19(1), pages 1-33, March.
    16. Gordon H. Hanson & Raymond J. Mataloni & Matthew J. Slaughter, 2001. "Expansion Strategies of U.S. Multinational Firms," BEA Papers 0012, Bureau of Economic Analysis.
    17. Josh Ederington & Arik Levinson & Jenny Minier, 2005. "Footloose and Pollution-Free," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 92-99, February.
    18. Arik Levinson, 2009. "Technology, International Trade, and Pollution from US Manufacturing," American Economic Review, American Economic Association, vol. 99(5), pages 2177-2192, December.
    19. Dasgupta, Indro & Osang, Thomas, 2002. "Globalization and relative wages: further evidence from U.S. manufacturing industries," International Review of Economics & Finance, Elsevier, vol. 11(1), pages 1-16, April.
    20. Abhijit Sharma & Michael Dietrich, 2004. "The Indian Economy Since Liberalisation: the Structure and Composition of Exports and Industrial Transformation (1980 – 2000)," Working Papers 2004004, The University of Sheffield, Department of Economics, revised May 2004.

    More about this item

    Keywords

    outsourcing; specialization profiles; revealed comparative advantages; relative wages; employment restructuring; Competitive pressure; outsourcing; specialization profiles; revealed comparative advantages; relative wages; employment restructuring;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:ifwkwp:1093. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.