Volatile Multinationals? Evidence from the Labor Demand of German Firms

52 Pages Posted: 8 Jun 2016

Date Written: 2007

Abstract

Does more FDI make the world a riskier place for workers? We analyze whether an increase in multinational firms' activities is associated with an increase in firm-level employment volatility. We use a firm-level dataset for Germany which allows us to distinguish between purely domestic firms, domestic multinationals, their foreign affiliates, and foreign firms that are active in Germany. We decompose the volatility of firms into their reaction and their exposure to aggregate developments. Generally, we find no above-average wage and output elasticities for multinational firms.

Keywords: Employment volatility, labor demand, multinational firms

JEL Classification: J23, F23

Suggested Citation

Buch, Claudia M. and Lipponer, Alexander, Volatile Multinationals? Evidence from the Labor Demand of German Firms (2007). Bundesbank Series 1 Discussion Paper No. 2007,22, Available at SSRN: https://ssrn.com/abstract=2785297

Claudia M. Buch (Contact Author)

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Alexander Lipponer

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany

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