Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden

11 Pages Posted: 28 Jan 2012

See all articles by Magnus Blomström

Magnus Blomström

affiliation not provided to SSRN

Gunnar Fors

Research Institute of Industrial Economics (IFN)

Robert E. Lipsey

National Bureau of Economic Research (NBER) at New York (Deceased)

Date Written: November 1997

Abstract

We compare the relation between foreign affiliate production and parent employment in US manufacturing multinationals with that in Swedish firms. US multinationals appear to have allocated some of their more labour‐intensive operations selling in world markets to affiliates in developing countries, reducing the labour intensity in their home production. Swedish multinationals produce relatively little in developing countries and most of that has been for sale within host countries with import‐substituting trade regimes. The great majority of Swedish affiliate production is in high‐income countries, the United States and Europe, and is associated with more employment, particularly blue‐collar employment, in the parent companies. The small Swedish‐owned production that does take place in developing countries is also associated with more white‐collar employment at home. The effects on white‐collar employment within the Swedish firms have grown smaller and weaker over time.

Suggested Citation

Blomström, Magnus and Fors, Gunnar and Lipsey, Robert E., Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden (November 1997). The Economic Journal, Vol. 107, Issue 445, pp. 1787-1797, 1997. Available at SSRN: https://ssrn.com/abstract=1994230 or http://dx.doi.org/10.1111/j.1468-0297.1997.tb00082.x

Magnus Blomström (Contact Author)

affiliation not provided to SSRN

No Address Available

Gunnar Fors

Research Institute of Industrial Economics (IFN)

Grevgatan 34, 2nd floor
S-114 85 Stockholm, SE-102 15
Sweden

Robert E. Lipsey

National Bureau of Economic Research (NBER) at New York (Deceased)

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