Labour Demand Adjustment: Does Foreign Ownership Matter?

18 Pages Posted: 27 Oct 2015

See all articles by Emmanuel Dhyne

Emmanuel Dhyne

National Bank of Belgium

Catherine Fuss

National Bank of Belgium

Claude Mathieu

University Paris-Est Créteil (UPEC)

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Date Written: December 2015

Abstract

This paper examines whether multinationals differ in their employment adjustment from domestic companies, using a panel of 5,544 Belgian firms observed between 1998 and 2005. More precisely, we estimate labour adjustment costs by worker and firm types. We propose a new flexible specification that takes into account the role of firm size in adjustment costs. Our results indicate that adjusting white‐collar employment is around half as costly for multinational firms (MNFs) as for domestic firms of the same size. The remaining differential in adjustment costs between MNFs and domestic firms might result, among other things, from multinationals' stronger bargaining power.

Suggested Citation

Dhyne, Emmanuel and Fuss, Catherine and Mathieu, Claude, Labour Demand Adjustment: Does Foreign Ownership Matter? (December 2015). Oxford Bulletin of Economics and Statistics, Vol. 77, Issue 6, pp. 854-871, 2015. Available at SSRN: https://ssrn.com/abstract=2680430 or http://dx.doi.org/10.1111/obes.12097

Emmanuel Dhyne (Contact Author)

National Bank of Belgium ( email )

Brussels, B-1000
Belgium

Catherine Fuss

National Bank of Belgium ( email )

Brussels, B-1000
Belgium

Claude Mathieu

University Paris-Est Créteil (UPEC) ( email )

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