Abstract
Conventional analysis has sought to explain the determinants of price competitiveness by way of national factors, but given the current degree of international fragmentation of production, a more holistic perspective needs to be explored. This document develops a specific proposal that permits the indicator on vertically integrated unit labor costs (VIULCs) to be broken down into its fundamental components; also, the evolution of this indicator is explored for the German automotive sector, to determine which component might best elucidate the evolution of the VIULCs. The results show a decrease in VIULCs deriving from the German sector as well as from its suppliers, confirming the relevant effects of outsourcing and offshoring strategies. Moreover, wage restraint among suppliers coupled with productivity gains are found to explain the overall reduction in VIULCs. JEL classification: P16, F15, F23,
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Similar Papers
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.