How Does Multinational Production Affect the Measurement of Competitiveness?

Labor Rights and Multinational Production, by LaynaMosley. Cambridge University Press, Cambridge, 2011, 306 pp. ISBN: 978 0 521694414, £19.99, paperback; ISBN: 978 0 521872812, £55.00, hardback.

British Journal of Industrial Relations ◽

10.1111/j.1467-8543.2012.00911_4.x ◽

2012 ◽

Vol 50 (4) ◽

pp. 816-817

Author(s):

Kimberly Ann Elliott

Keyword(s):

Labor Rights ◽

Cambridge University ◽

Multinational Production

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Fragmentation and multinational production

European Economic Review ◽

10.1016/s0014-2921(98)00106-8 ◽

1999 ◽

Vol 43 (4-6) ◽

pp. 935-945 ◽

Cited By ~ 107

Author(s):

Anthony J. Venables

Keyword(s):

Multinational Production

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U.S. Exports and Multinational Production

Review of Economics and Statistics ◽

10.1162/rest.88.3.531 ◽

2006 ◽

Vol 88 (3) ◽

pp. 531-548 ◽

Cited By ~ 4

Author(s):

Huiwen Lai ◽

Susan Chun Zhu

Keyword(s):

Multinational Production

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Selection and Market Reallocation: Productivity Gains from Multinational Production

American Economic Journal Economic Policy ◽

10.1257/pol.20150437 ◽

2018 ◽

Vol 10 (2) ◽

pp. 1-38 ◽

Cited By ~ 10

Author(s):

Laura Alfaro ◽

Maggie X. Chen

Keyword(s):

Economic Research ◽

Policy Debate ◽

Aggregate Productivity ◽

Productivity Improvement ◽

Firm Level ◽

Domestic Firms ◽

Multinational Production ◽

Substantial Bias ◽

Productivity Gains ◽

Research And Policy

Assessing productivity gains from multinational production has been a vital topic of economic research and policy debate. Positive productivity gains are often attributed to productivity spillovers; however, an alternative, much less emphasized channel is selection and market reallocation, whereby competition leads to factor and revenue reallocation within and between domestic firms and exits of the least productive firms. We investigate the roles of these different mechanisms in determining aggregate-productivity gains using a unifying framework that explores the mechanisms' distinct predictions on the distributions of domestic firms: within-firm productivity improvement shifts rightward or reshapes the productivity distribution, while selection and market reallocation move the revenue and employment distributions leftward and raise left truncations. Using a rich cross-country firm-level panel dataset, we find significant evidence of both mechanisms and effects of competition in product, technology, and labor space. However, selection and market reallocation account for the majority of aggregate-productivity gains, suggesting ignoring this channel could lead to substantial bias in understanding the nature of productivity gains from multinational production. (JEL D22, D24, F14, F23, G32, O47)

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