Working Paper Series, FIEF - Trade Union Institute for Economic Research
Bandick Roger and Pär Hansson
Inward FDI and Demand for Skills in Sweden
Abstract: We observe a substantial increase of foreign ownership in
Sweden in the 1990s. Did that have any effect on relative demand for
skilled labor? Has technology transfers often associated with inward FDI
led to increased demand for skills due to skilled-biased technical change?
Are there any grounds for the worries in the public Swedish debate that
more skilled activities have been moved abroad to countries where the
headquarters are located? We obtain support for that the share of skilled
labor tends to rise in non-multinationals but not in multinationals that
become foreign owned. Yet it does not seem to be any relationship between
increased foreign ownership and the relative demand for skilled labor in
Swedish manufacturing between 1986 and 2000. Interestingly, increased
competition from low-wage countries, rather than inward FDI, has had
significant impact on skill upgrading, and appears to have played a larger
role in the 1990s than before.
Keywords: Foreign ownership; skill upgrading; wage differentials; (follow links to similar papers)
JEL-Codes: F23; J23; J31; (follow links to similar papers)
27 pages, October 14, 2005
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