Kiel Working Papers, Kiel Institute for World Economics
No 1093:
Globalization of the Automobile Industry ; Traditional Locations under Pressure?
Julius Spatz and Peter Nunnenkamp
Abstract: Even though the automobile industry is technologically
advanced, the increasing integration of low-income countries into the
global division of labor has put competitive pressure on traditional
automobile producing countries. New end-producers emerged in Asia, Latin
America as well as Southern and Central Europe. In addition, the automobile
industries of Germany, Japan and the United States engaged in outsourcing
of relatively labor intensive segments of the value chain, especially on a
regional level. Our analysis of the labor market effects of these
developments supports the predictions of trade models: Low-skilled workers
and labor intensive subsectors of the automobile industry in traditional
locations suffered deteriorating wage and employment prospects in the
process of globalization. The adjustment to fiercer competition from below
differed considerably between Germany, Japan and the United States.
Economic restructuring was least pronounced in the US automobile industry,
largely due to the resistance of trade unions. As a result, the employment
record and the world-market performance of US automobile producers turned
out to be poor compared to their German and Japanese counterparts.
Keywords: Competitive pressure, outsourcing, specialization profiles, revealed comparative advantages, relative wages, employment restructuring; (follow links to similar papers)
JEL-Codes: F14; L62; (follow links to similar papers)
46 pages, January 2002
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