Staying Home Or Moving Away? Effect Of Restructuring On Employment In Multinational Headquarters And Their Affiliates
Source: Katholieke Universiteit Leuven
This paper analyzes employment growth in Belgian multinational enterprises' headquarters relative to their affiliates. The authors find that headquarters have on average 2.5% more employment growth than their affiliates. When they go through restructuring headquarters reduce employment by 4.4% less than their affiliates and affiliates located further away from their headquarters suffer more. This effect almost doubles for firms that operate in manufacturing. Globalization has changed the nature of production drastically resulting in an increased number of global firms and increased international fragmentation of production.