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Multinational Firms, Acquisitions, and Job Tasks

Heyman, Fredrik; Nilsson-Hakkala, Katariina LU and Sjöholm, Fredrik LU (2014) In European Economic Review 66. p.248-265
Abstract
We revisit the question how inward FDI and multinational ownership affect relative labor demand. Motivated by the recent literature that distinguish between skills and tasks, we argue that the impact of multinational and foreign ownership on the demand for labor is better captured by focusing on job tasks rather than education. We use Swedish matched employer-employee data and find that changes of local firms to both foreign and Swedish multinationals increase the relative demand for non-routine and interactive job tasks in the targeted local firms. Hence, in a high-income country, both inward and outward FDI have a task upgrading impact on local firms. The effect is primarily driven by wage effects leading to increased wage dispersion for... (More)
We revisit the question how inward FDI and multinational ownership affect relative labor demand. Motivated by the recent literature that distinguish between skills and tasks, we argue that the impact of multinational and foreign ownership on the demand for labor is better captured by focusing on job tasks rather than education. We use Swedish matched employer-employee data and find that changes of local firms to both foreign and Swedish multinationals increase the relative demand for non-routine and interactive job tasks in the targeted local firms. Hence, in a high-income country, both inward and outward FDI have a task upgrading impact on local firms. The effect is primarily driven by wage effects leading to increased wage dispersion for workers with different non-routine and interactive task intensity. We also show that the effect is not the same as skill upgrading since dividing employees by educational attainment does not capture changes in the relative labor demand. Hence, our results suggest a new aspect of the labor market consequences of FDI. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Job Tasks, Labor Demand, Skill Groups, Multinational Firms, Foreign Ownership, Cross-Border Acquisitions, FDI
in
European Economic Review
volume
66
pages
248 - 265
publisher
Elsevier
external identifiers
  • wos:000332439200014
  • scopus:84893124909
ISSN
1873-572X
DOI
10.1016/j.euroecorev.2013.12.003
language
English
LU publication?
yes
id
45d820e5-209a-46d6-85c4-35d166fe80bc (old id 4221922)
alternative location
http://swopec.hhs.se/iuiwop/abs/iuiwop0781.htm
date added to LUP
2014-01-03 11:26:36
date last changed
2017-11-12 03:11:39
@article{45d820e5-209a-46d6-85c4-35d166fe80bc,
  abstract     = {We revisit the question how inward FDI and multinational ownership affect relative labor demand. Motivated by the recent literature that distinguish between skills and tasks, we argue that the impact of multinational and foreign ownership on the demand for labor is better captured by focusing on job tasks rather than education. We use Swedish matched employer-employee data and find that changes of local firms to both foreign and Swedish multinationals increase the relative demand for non-routine and interactive job tasks in the targeted local firms. Hence, in a high-income country, both inward and outward FDI have a task upgrading impact on local firms. The effect is primarily driven by wage effects leading to increased wage dispersion for workers with different non-routine and interactive task intensity. We also show that the effect is not the same as skill upgrading since dividing employees by educational attainment does not capture changes in the relative labor demand. Hence, our results suggest a new aspect of the labor market consequences of FDI.},
  author       = {Heyman, Fredrik and Nilsson-Hakkala, Katariina and Sjöholm, Fredrik},
  issn         = {1873-572X},
  keyword      = {Job Tasks,Labor Demand,Skill Groups,Multinational Firms,Foreign Ownership,Cross-Border Acquisitions,FDI},
  language     = {eng},
  pages        = {248--265},
  publisher    = {Elsevier},
  series       = {European Economic Review},
  title        = {Multinational Firms, Acquisitions, and Job Tasks},
  url          = {http://dx.doi.org/10.1016/j.euroecorev.2013.12.003},
  volume       = {66},
  year         = {2014},
}