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Firm Dynamics and Employment Adjustment: Multinational vs Domestic Firms

Published online by Cambridge University Press:  09 January 2015

Pierre Blanchard ,
Emmanuel Dhyne ,
Catherine Fuss  and
Claude Mathieu
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Summary

The economic and financial crisis has meant sizeable employment losses that resulted from different adjustment mechanisms in domestic firms and multinational companies. This may be due to either production plant closures or downsizing by firms that remain active. This paper evaluates the importance of both phenomena for multinational and domestic firms in Belgium over the period preceding the crisis (1997-2008), using a firm-level dataset. Our results reveal that multinational enterprises tend to leave the local market more frequently than domestic firms with comparable firm and sector characteristics. Further, multinational incumbents face employment adjustment costs for white-collar workers that are around half of those borne by domestic firms. In sum, our findings suggest that multinational firms are more flexible in terms of plant location as well as in terms of employment adjustment. However, before the crisis, foreign multinationals created more jobs on average than other types of firms.

La crise économique et financière actuelle a causé de nombreuses pertes d'emploi, à la suite de différents mécanismes d'ajustement dans les entreprises domestiques et les multinationales. Ces mécanismes s'opèrent soit au travers de fermetures d'unités de production, soit de réductions d'effectifs par des entreprises qui continuent à opérer. Cet article évalue l'importance de ces deux processus en comparant les multinationales et les entreprises domestiques belges au cours de la période précédant la crise (1997-2008). L'analyse économétrique réalisée utilise des données individuelles d'entreprises. Nos résultats font apparaître que les multinationales ont tendance à quitter plus fréquemment le marché local que les entreprises domestiques présentant des caractéristiques comparables. Par ailleurs, les multinationales en activité sont confrontées à des coûts d'ajustement de l'emploi des travailleurs en col blanc qui sont environ deux rois moins élevés que ceux supportés par les entreprises domestiques. Nos résultats suggèrent donc que les multinationales sont plus flexibles tant sur le plan de la localisation que de l'ajustement de l'emploi. Toutefois, le processus d'ajustement a pu jouer dans l'autre sens. En effet, avant la crise, les multinationales étrangères ont créé en moyenne plus d'emplois que leurs concurrentes domestiques.

Keywords

multinational firmslabour adjustment costsfirm exitF23J23entreprises multinationalescoûts d'ajustements du travailsorties de firmesF23J23
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 79 , Issue 1 , March 2013 , pp. 59 - 81
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2013 

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Footnotes

*

Université Paris-Est, ERUDITE, UPEC, F-94010, Créteil, France

†

National Bank of Belgium, Research Department, and Université de Mons, Centre de recherche Warocqué

‡

Corresponding author, National Bank of Belgium, Research Department and Université Libre de Bruxelies e-mail: catherine.fuss@nbb.be

§

Université Paris-Est, ERUDITE, UPEC, F-94010, Créteil, France

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