TY  - RPRT
        AU  - Muendler, Marc-Andreas
AU  - Becker, Sascha O.
        TI  - Margins of Multinational Labor Substitution
        PY  - 2006/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 2131
        UR  - https://www.iza.org/publications/dp2131
        AB  - Multinational labor demand responds to wage differentials at the extensive margin, when a multinational enterprise (MNE) expands into foreign locations, and at the intensive margin, when an MNE operates existing affiliates across locations. We derive conditions for parametric and nonparametric identification of an MNE model to infer elasticities of labor substitution at both margins, controlling for location selectivity. Prior studies have rarely found foreign wages or operations to affect employment. Our strategy detects salient adjustments at the extensive margin for German MNEs. With every percentage increase in German wages, German MNEs allocate 2,000 manufacturing jobs to Eastern Europe at the extensive margin and 4,000 jobs overall.
        KW  - multinational enterprise
KW  - location choice
KW  - sample selectivity
KW  - labor demand
KW  - translog cost function
KW  - nonparametric estimation
        ER  -