Abstract
This article investigates how the ownership of firms (affiliates of foreign multinational firms, or uni-national firms) affects their internal workforce composition. We consider this issue empirically by adopting a novel database on the workforce composition of companies operating in the manufacturing industry in north-east Italy. The workforce composition (in terms of skill level, gender and the less investigated characteristics of age and nationality) of affiliates of foreign multinational enterprises (FMNs) are compared with a counterfactual of uni-national firms, constructed using propensity score matching. Consistent with previous studies, the results report that FMNs recruit a larger number of highly-skilled workers. Our main findings show that FMNs employ a lower number of foreign and less experienced (young) workers. The employment of native and more experienced workers in FMNs seems to suggest that foreign companies use domestic ‘inherited’ stock of manufacturing knowledge and skills. By using this stock, they contribute to sustaining its development.
Highlights
The opposite change in the task composition occurs at national firms/single domestic enterprises (NATs); NATs reduce employment in non-routine and interactive tasks and raise employment in low-end tasks. They raise the employment of highly skilled workers, as do Multinational enterprises (MNEs) (Becker et al 2013: 98). We draw upon these recent contributions to further explore the inward component; in particular, we investigate the presence of any differences in terms of internal workforce composition between foreign multinational enterprises (FMNs) and NATs
The present article compares FMNs and NATs and explores how firm ownership affects the internal workforce composition of companies located in the Italian region of Veneto, a region globally renowned for its manufacturing production
The results of the econometric analysis preliminary to the counterfactual analysis pinpoint that FMNs are larger in terms of turnover than NATs, and are more open to high-tech sectors—in line with previous research (e.g. Castellani and Zanfei 2006)
Summary
The characteristics of workers—i.e. employees’ skill level, gender, age and nationality—matter for a broad variety of individual, firm, sector, and regional outcomes; such as knowledge transfer/sharing (e.g. Blomstrom and Kokko 2003), innovation (e.g. Fassio et al 2018; Frosch 2011), and productivity (e.g. Hyun et al 2015). This article focuses on analysing whether internal workforce composition differs according to firm ownership, by comparing the employment choices made by FMNs with those of NATs. The article investigates how companies employ the local workforce, be they host-country nationals or foreigners, by looking at skill level, age, gender and nationality. The article contributes to the understanding of the relationship between firm ownership and the use of its workforce, in particular investigating employment choices, in terms of skill level, age, gender and nationality It does so by exploring how firm ownership (FMN and NAT) affects a company’s internal workforce composition during the economic crisis within the context of the Italian region of Veneto, a region renowned worldwide for its manufacturing heritage.
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