TY  - JOUR
AU  - Muendler,Marc-Andreas
AU  - Becker,Sascha O.
TI  - Margins of Multinational Labor Substitution
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14776
PY  - 2009
Y2  - March 2009
UR  - http://www.nber.org/papers/w14776
L1  - http://www.nber.org/papers/w14776.pdf
N1  - Author contact info:
Marc-Andreas Muendler
Department of Economics, 0508
University of California, San Diego
9500 Gilman Drive
La Jolla, CA 92093-0508
Tel: 858/534-4799
Fax: 858/534-7040
E-Mail: muendler@ucsd.edu

Sascha O. Becker
Department of Economics
University of Warwick
Coventry CV4 8GL
United Kingdom
E-Mail: s.o.becker@warwick.ac.uk
AB  - Employment at multinational enterprises (MNEs) responds to wages at the extensive margin, when an MNE enters a foreign location, and at the intensive margin, when an MNE operates existing affiliates. We present an MNE model and conditions for parametric and nonparametric identification. Prior studies rarely found wages to affect MNE employment. We document a complementarity bias when the extensive margin is excluded and detect salient labor substitution at both margins for German manufacturing MNEs. With a one-percent increase in home wages, for instance, MNEs add 2,000 jobs in Eastern Europe at the extensive margin and 4,000 jobs overall; a converse one-percent drop in Eastern European wages removes 730 German MNE jobs.
ER  -