Staying home or moving away? The effect of restructuring on employment in multinational enterprises
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Date
2012-01
Authors
Abraham, Filip
Goesaert, Tim
Konings, Jozef
Journal Title
Journal ISSN
Volume Title
Publisher
Algemeen secretariaat – Steunpunt beleidsrelevant Onderzoek Fiscaliteit & Begroting
Abstract
This paper analyzes the geographic dispersion of employment restructuring in multinational
enterprises, where we distinguish between headquarters and geographically dispersed affili-
ates. To this end, we use data of 255 Belgian parents and 1,887 affiliates between 1996 and
2005. We show that for multinational enterprises that restructure headquarters have superior
employment performance than their affiliates. This effect seems to be stronger for vertically
integrated firms, which is consistent with theories of imperfect information and increased
agency costs. We also show that proximity matters: restructuring hurts the most the further
the affiliate is located from the headquarter. This effect is consistent with the monitoring
difficulties that are associated with vertical FDI firms and with the role of social network effects.
Description
Keywords
employment growth, multinational enterprises, headquarters, affiliates, vertical FDI, Research Subject Categories::SOCIAL SCIENCES::Business and economics
Citation
Abraham Filip, Goesaert Tim, Konings Jozef, 2012, Algemeen secretariaat – Steunpunt beleidsrelevant Onderzoek Fiscaliteit & Begroting; Staying home or moving away? The effect of restructuring on employment in multinational enterprises. http://nur.nu.edu.kz/handle/123456789/1894