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Multinational production, skilled labor, and real wages

Author: James R Markusen; Anthony Venables; National Bureau of Economic Research.
Publisher: Cambridge, MA : National Bureau of Economic Research, ©1996.
Series: Working paper series (National Bureau of Economic Research), working paper no. 5483.
Edition/Format:   Print book : Document   Computer File : EnglishView all editions and formats
Summary:
Abstract: Adapting our earlier model of multinationals, we address policy issues involving wages and labor skills. Multinational firms may arise endogenously, exporting their firm-specific knowledge capital to foreign production facilities, and geographically fragmenting production into skilled and unskilled-labor-intensive activities. Multinationals thus alter the nature of trade, from trade in goods (produced with  Read more...
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Details

Material Type: Document, Internet resource
Document Type: Book, Computer File, Internet Resource
All Authors / Contributors: James R Markusen; Anthony Venables; National Bureau of Economic Research.
OCLC Number: 34578622
Notes: "March 1996."
Description: 29, [7] pages : illustrations ; 22 cm.
Series Title: Working paper series (National Bureau of Economic Research), working paper no. 5483.
Responsibility: James R. Markusen, Anthony J. Venables.

Abstract:

Abstract: Adapting our earlier model of multinationals, we address policy issues involving wages and labor skills. Multinational firms may arise endogenously, exporting their firm-specific knowledge capital to foreign production facilities, and geographically fragmenting production into skilled and unskilled-labor-intensive activities. Multinationals thus alter the nature of trade, from trade in goods (produced with both skilled and unskilled labor) to trade in skilled- labor-intensive producer services. Results shed light on several policy questions. First, multinationals increase the skilled/unskilled wage gap in the high income country and, under some circumstances, in the low income country as well. Second, there is a sense in which multinationals export low skilled jobs to the lower income country. Third, trade barriers do not protect unskilled labor in the high income countries. By inducing a regime shift to multinationals, trade barriers protect the abundant factor, at least in the high income country and possibly in both countries. Fourth, a convergence in country characteristics induces the entry of multinationals and raises the skilled-unskilled wage gap in the initially large and skilled-labor-abundant country, and possibly in the small skilled-labor-scarce country as well.

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