Is labor mobility a channel for spillovers from multinationals? : evidence from Norwegian manufacturing

This paper documents labor mobility flows from multinationals (MNEs) to non-MNEs in Norwegian manufacturing during the 1990s. 14,400 workers in MNEs move to non-MNEs during this period. By the year 2000, 28 percent of the non-MNEs employed workers with experience from MNEs. Consistent with spillovers through mobility, I estimate a robust and significantly positive correlation between the share of workers with MNE-experience and the productivity of non-MNEs. Workers with MNE-experience contribute 20% more to the productivity of their plant than workers without experience from MNEs, even after controlling for differences in unobservable worker characteristics. The difference between the private returns to mobility and the productivity effect at the plant level suggests that labor mobility from MNEs to non-MNEs represents a true knowledge externality

Picking “lemons” or “cherries”? : domestic and foreign acquisitions in Norwegian manufacturing

We compare the performance in employment, wages and productivity for domestic plants acquired by new domestic and foreign owners. Prospective foreign owners pick large, high-wage, high-productivity plants, while new domestic owners choose average performers of above average size. Employment, labour productivity and total factor productivity decline in domestic acquisition targets before acquisitions, only wages recover afterwards. Employment, wages and labour productivity increase after foreign acquisitions. The sample selection introduced by long-term comparisons and a focus on unique events introduces a downward bias into the results for domestic acquisitions and an upward bias for the foreign acquisitions

Kunnskapsstatus for hva økonomisk forskning har avdekket om flernasjonale selskapers internprising i Norge

Ved å manipulere prisene på selskapsinterne transaksjoner kan flernasjonale selskaper flytte overskudd fra høyskatteland til lavskatteland. Slik overskuddsflytting kan ha stor innflytelse på selskapsskattebasen til vertslandene. Denne rapporten oppsummerer den kunnskapen akademisk forskning har frembrakt om hvor stort problem flernasjonale selskapers internprising representerer for norske skattemyndigheter. Det er svært få tidligere empiriske studier som bruker norske data. Vi drøfter disse inngående og supplerer litteraturen med omfattende egne analyser. Vi avdekker sammenhenger som er konsistente med overskuddsflytting gjennom manipulering av internpriser. Vi finner at flernasjonale selskaper både flytter overskudd ut av Norge og inn til Norge - alt avhengig av hvilke skattesatser de står overfor i andre land. Vi anslår at nettostrømmen går ut av Norge og at skatteunndragelsen kan være i størrelsesorden 30 prosent av det potensielle skatteprovenyet fra utenlandske flernasjonale foretak. Dette estimatet er svært usikkert, og videre forskning er nødvendig for å bedre kunnskapen på feltet

Is mobility of labour a channel for spillovers from multinationals to local domestic firms?

This paper documents the extent of labour mobility from multinationals (MNEs) to non-MNEs in Norwegian manufacturing during the 1990s. On average, each year around one percent of workers in MNEs move to non-MNEs. By the year 2000, 45 percent of the non-MNEs employed workers with experience from MNEs. These workers earned a wage premium of more than 3 percent compared to their new colleagues in the non-MNEs. I estimate a Cobb-Douglas production function for non- MNEs and include the share of workers with recent MNE experience. Consistent with mobility being a channel for knowledge diffusion, I find that these workers contribute 20-25 percent more to productivity than workers without experience from MNEs. The difference between the private returns to mobility and the productivity effect at the plant level suggests that labour mobility from MNEs to non-MNEs represents a true knowledge externality

Rent Sharing with Footloose Production. Foreign Ownership and Wages Revisited

We present a bargaining model of wage and employment determina- tion, where we show that foreign acquisitions might hurt the bargaining outcome of powerful unions by giving the firm a credible threat to move production abroad. Using detailed data on firms and workers in manufac- turing, including information on union membership and foreign ownership, we find, in line with the predictions of our model, that foreign acquisitions negatively impact the outcome of workers in highly unionized plants

Multinationals’ mode of entry with presence of vertical spillovers

Multinationals’ mode of foreign expansion may depend on whether or not they expect technological externalities or spillovers to generate new competition. Existing models where ex-post spillovers affect the ex-ante entry choice usually study the choice between exporting and FDI with horizontal spillovers. I consider a monopoly firm with a vertical production structure that has four possible modes of entry, one of which includes outsourcing of intermediate input production to a host county firm. Technological spillovers in this model are vertical, generating threat of entry of a new intermediate input producer. When outsourcing contracts are incomplete, vertical spillovers that generate threat of entry upstream do not necessarily benefit the multinational in the downstream market

The contribution of foreign entrants to employment and productivity growth

We compare employment and productivity dynamics in foreign and domestic entrants, exitors, survivors and acquisitions in Norwegian manufacturing from 1979- 2000. All types of foreign plants are on average more productive than their domestic counterparts. There is more gross job reallocation in domestic than in foreign plants. Contrary to common beliefs, foreign owners do not acquire highly productive do- mestic plants in order to lay off their employees. Instead they manage to reverse a negative trend in productivity and employment in the acquired plants. During the boom from 1992-97 foreign plants taken together, with a market share of 38%, accounted for 61% of productivity growth

Foreign firms and host-country productivity : does the mode of entry matter?

Foreign direct investment is often considered an important source of knowledge spillovers. However, results from the empirical literature relating overall foreign presence to host country productivity are ambiguous. We argue that this may be because different modes of entry may have different effects on productivity. Using 24 years of comprehensive panel data for Norwegian Manufacturing, we find that greenfield entry has a negative impact on the productivity growth of domestic plants, while entry via acquisition affects local productivity positively. The net effect is a small positive effect of an overall change in foreign presence on local productivity growth