Does Nationality of Ownership Matter
نویسندگان
چکیده
Do multinational firms exhibit different patterns of labor demand from purely domestic firms? Many standard models of trade and multinational companies suggest such differences. We examine this question using a plant-level panel covering U.K. manufacturing from 1973 through 1992, where we can distinguish U.K.-headquartered multinationals, foreign-owned multinationals, and domestic U.K. firms. Across these three ownership groups we look for differences both on the intensive margin, in terms of labor-demand elasticities, and on the extensive margin, in terms of plant shutdowns. For our sample period we estimate that both groups of multinational plants had larger increases than did domestic plants in the elasticity of demand for production labor. These increases were driven largely by greater substitutability between production labor and materials. We also estimate that both types of multinational plants are more likely to shut down than domestic plants are, conditional on a set of operational advantages enjoyed by multinationals that make them less likely to shut down. Email addresses: [email protected], [email protected], [email protected]. For very helpful discussion we thank Patty Anderson. The data in this paper were used as part of the U.K. Office of National Statistics businessdata-linking project. For data assistance we thank Ralf Martin. For financial support Haskel and Fabbri thank the U.K. Economic and Social Research Council for grant #R000223239, and Slaughter thanks the National Science Foundation.
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