Foreign direct investment, heterogeneous workers and employment security: Evidence from Germany

Bachmann, Ronald; Baumgarten, Daniel; Stiebale, Joel

doi:10.1111/caje.12094

Cited by 13 publications

(9 citation statements)

References 83 publications

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“…4 Our results are in line with recent empirical works. Bachmann et al (2014) find that outward FDI going to Central and Eastern Europe decreases job security using linked individual-firm data.…”

Section: Resultsmentioning

confidence: 91%

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Flexibility in Wage Setting Under the Threat of Relocation

Goeddeke

Haucap

Herr

et al. 2017

Labour

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily reflect those of the editor. Terms of use: Documents in AbstractRelocation of production to countries with low labour cost have induced increased labour market flexibility, which has been praised as a silver bullet for economic growth and low unemployment. Within a unionised oligopoly framework, in which a multi-national firm has the option to relocate its production to a foreign country, we analyse the welfare implications of both centralised and flexible wage setting regimes. For very low foreign wages, wage flexibility leads to higher welfare than a rigid centralised regime. In contrast, for "intermediate" wage levels in the foreign country, an industry-wide uniform wage leads to higher social welfare than flexible wages.JEL Classification: F23, J51, L13.

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Section: Resultsmentioning

confidence: 91%

“…Bachmann et al . () find that outward FDI going to Central and Eastern Europe decreases job security using linked individual‐firm data. Other case studies show that relocation threats indeed trigger lower wages: Raess and Burgoon () conclude in their empirical study on eight German factories that greater foreign investments tend to trigger wage concessions.…”

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confidence: 99%

Flexibility in Wage Setting Under the Threat of Relocation

Goeddeke

Haucap

Herr

et al. 2017

Labour

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“…However, existing studies are yet to prove whether ODI has a long-term and positive effect on employment security. Most researchers acknowledge that ODI enterprises generally have a competitive advantage and offer higher wages and more stable jobs, but they also stress that this does not necessarily mean there will be an increase in overall social wellbeing (Girma and Görg 2007), because the ODI inflows-especially those with an extensive margin-will have a negative effect on the employment of low-skilled workers in the recipient industry (Bachmann et al 2014). Moreover, not all foreign enterprises have a competitive edge.…”

Section: Effects Of Odi On Distribution and Domestic Politicsmentioning

confidence: 99%

What types of Chinese ODI activities are most prone to political intervention?

Asan¹,

Xiao²

2019

The Chinese Economic Transformation: Views From Young Economists

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“…It is also more open to international trade than most other large developed Economies and registers highest level of exports worldwide (Bachmann and Braun, 2011). Second, as emphasised by Bachmann et al (2014), the German labour markets is highly regulated with rigid wages, and shocks such as outsourcing might well be absorbed through employment rather than through wages, as confirmed by Görg and Görlich (2012). Third, international outsourcing has grown substantially in Germany over recent years.…”

Section: Introductionmentioning

confidence: 98%

Offshoring, job satisfaction and job insecurity

Budría

Baleix

2020

Economics

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This paper investigates the effects of offshoring on individual job satisfaction and perceived risk of job loss. The authors merge microdata from the German Socio-economic Panel dataset (SOEP) with indicators of insertion in global value chains at the industry level for the period 2000-2013. They test two hypotheses. First, the authors investigate whether workers in industries with higher offshoring intensity report lower job satisfaction and/or are more prone to be unsecure at their jobs. Second, they test whether these effects differ among four categories of collars. Their findings indicate that offshoring is associated with lower job satisfaction. The results are also indicative of some heterogeneity in the offshoring effect, with high skilled white-collar workers being mostly unaffected by offshoring and low skilled blue-collar workers showing the largest negative effects. Discriminating between manufacturing and services activities, the authors find that the extent of heterogeneity and the offshoring effect is relatively larger in manufacturing industries. They also find that the effect of offshoring intensity upon job satisfaction is more negative and significant in periods of economic decline. Finally, the results show that offshoring is not significantly related with job insecurity, a result that applies to all workers' categories. Still, in a period of economic decline job insecurity may increase when the offshoring intensity rises.

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Foreign direct investment, heterogeneous workers and employment security: Evidence from Germany

Cited by 13 publications

References 83 publications

Flexibility in Wage Setting Under the Threat of Relocation

Flexibility in Wage Setting Under the Threat of Relocation

What types of Chinese ODI activities are most prone to political intervention?

Offshoring, job satisfaction and job insecurity

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