Multinationals, Offshoring, and the Decline of U.S. Manufacturing

Boehm, Christoph; Flaaen, Aaron; Pandalai-Nayar, Nitya

doi:10.2139/ssrn.2928253

Cited by 21 publications

(23 citation statements)

References 42 publications

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“…Some firms can also transition from manufacturing to nonmanufacturing, as they offshore the entirety of their production process, as examined in Bernard and Fort (2015) and Bernard, Smeets, and Warzynski (2017). More generally, Boehm, Flaaen, and Pandalai-Nayar (2015) examine the role of offshoring by US and foreign-owned multinationals in understanding the evolution of US manufacturing employment. Although imports of goods have received much more attention than imports of services, because of the scarcity of data on trade in services, notable exceptions are Liu and Trefler (2008) and Breinlich and Criscuolo (2011).…”

Section: Firm Importingmentioning

confidence: 99%

Global Firms

Bernard

Jensen

Redding

et al. 2018

Journal of Economic Literature

215

109

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Research in international trade has changed dramatically over the last twenty years, as attention has shifted from countries and industries towards the firms actually engaged in international trade. The now-standard heterogeneous firm model posits measure-zero firms that compete under monopolistic competition and decide whether to export to foreign markets. However, much of international trade is dominated by a few “global firms,” which participate in the international economy along multiple margins and account for substantial shares of aggregate trade. We develop a new theoretical framework that allows firms to have large market shares and decide simultaneously on the set of production locations, export markets, input sources, products to export, and inputs to import. Using US firm and trade transactions data, we provide strong evidence in support of this framework's main predictions of interdependencies and complementarities between these margins of firm international participation. Global firms participate more intensively along each margin, magnifying the impact of underlying differences in firm characteristics and increasing their shares of aggregate trade. (JEL D22, F14, F23, L60, R32)

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Section: Firm Importingmentioning

confidence: 99%

Global Firms

Bernard

Jensen

Redding

et al. 2018

Journal of Economic Literature

215

109

View full text Add to dashboard Cite

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“…In related work, Boehm et al (2015) present establishment-level evidence that outsourcing did cut U.S. manufacturing employment while raising profits per worker of surviving production units. Glover and Short (2016) find the age composition of the work force has shifted towards workers that are less capable of extracting their marginal product of labor as a wage.…”

Section: Introductionmentioning

confidence: 99%

Growing Productivity Without Growing Wages: The Micro-Level Anatomy of the Aggregate Labor Share Decline

Kehrig

Vincent

2017

SSRN Journal

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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 aggregate labor share in U.S. manufacturing declined dramatically over the last three decades: Since the mid-1980's, the compensation for labor declined from 67% to 47% of value added which is unseen in any other sector of the U.S. economy. The labor share of the typical U.S. manufacturing plants, in contrast, rose by over 5 percentage points. We reconcile these two facts by documenting (1) an important reallocation of production towards "hyper-productive plants" and (2) a downward adjustment of the labor share of those same plants over time. These two related forces account for almost all the change in the trend of aggregate labor share in the manufacturing sector, with only a small role for exit of high-labor-share plants. Relative to their peers, plants that account for the majority of production by the late 2000's arrive at a low labor share by gradually increasing value added by a factor of three while keeping employment and compensation unchanged. Terms of use: Documents in

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“…For work hours we use Average Annual Hours Worked by Persons Engaged for United States. 2 All data come from FRED St. Louis. 3 We chose the non-residential and private category for two reasons.…”

Section: Wage Determination Methods In the Labor Marketmentioning

confidence: 99%

“…The majority of the added employment is in the service sector. 2 Similar methodology and data was used in Mincer's study on income distribution and human capital (1958). 3 FRED data on civilian labor force is monthly.…”

Section: Descriptive Analysis On Us Employment Compositionmentioning

confidence: 99%

The capital intensity factor that contributes to the United States Skilled Worker’s Average Wage Stagnation

Ding¹

2019

Proceedings of the 4th International Conference on Humanities Science, Management and Education Technology (HSMET 2019)

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Over the past 45 years, whereas the GDP has grown, skilled workers in America have experienced trivial increase in real wage. We find the stagnation a result of two periods of increase and one period of decrease in wage. This research aims to analyze this phenomenon and contributes to the study of the causes of wage fluctuation through a microscopic lens. This paper is unique from previous studies in methodology. We present our analysis by combining both macro and micro indicators. We incorporate capital investment and Marginal Revenue Productivity Theory, which we relate to productivity, in our study. Further, we use a multiple linear regression to establish a more solid quantitative support to the discussion. The variables we use in the regression are work hours, productivity, capital input, capital intensity, and real wage. The paper finds a strong correlation between average wage and capital intensity. This conclusion could help policymakers to design policies beneficial to skilled workers in the future.

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Multinationals, Offshoring, and the Decline of U.S. Manufacturing

Cited by 21 publications

References 42 publications

Global Firms

Global Firms

Growing Productivity Without Growing Wages: The Micro-Level Anatomy of the Aggregate Labor Share Decline

The capital intensity factor that contributes to the United States Skilled Worker’s Average Wage Stagnation

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