FOREIGN DIRECT-INVESTMENT AND EMPLOYMENT - HOME COUNTRY EXPERIENCE INTHE UNITED-STATES AND SWEDEN

We compare the relation between foreign affiliate production and paren t employment in US manufacturing multinationals with that in Swedish f irms. US multinationals appear to have allocated some of their more la bour-intensive operations selling in world markets to affiliates in de veloping countries, reducing the labour intensity in their home produc tion. Swedish multinationals produce relatively little in developing c ountries and most of that has been for sale within host countries with import-substituting trade regimes. The great majority of Swedish affi liate production is in high-income countries, the United States and Eu rope, and is associated with more employment, particularly blue-collar employment, in the parent companies. The small Swedish-owned producti on that does take place in developing countries is also associated wit h more white-collar employment at home. The effects on white-collar em ployment within the Swedish firms have grown smaller and weaker over t ime.