Production transfer within multinational enterprises and American wages

This paper tests whether the transfer of production sl:ages within US-headq uartered multinational enterprises (MNEs) from US parents to foreign affili ates has contributed to within-industry shifts in US relative labor demand toward the more-skilled. There are two main empirical results. First, there is evidence of MNE transfer during the past 20 years. Second, regression a nalysis does not support the MNE hypothesis. MNE transfer tends to have sma ll, imprecisely estimated effects on US relative labor demand. This finding is inconsistent with models of MNEs in which affiliate :activities substit ute for parent unskilled-labor-intensive activities. (C) 2000 Elsevier Scie nce B.V. All rights reserved. JEL classification: F21; F23; J31.