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Digitalization, Multinationals and Employment: An Empirical Analysis of Their Causal Relationships

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Gómez-Plana, A.G. and Latorre Muñoz, María Concepción (2019) Digitalization, Multinationals and Employment: An Empirical Analysis of Their Causal Relationships. Jahrbucher fur Nationalokonomie und Statistik, 239 (3). pp. 399-439. ISSN 0021-4027

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Official URL: https://www.degruyter.com/view/journals/jbnst/239/3/article-p399.xml



Abstract

This study measures the effects of digitalization related to Information and Communication Technologies (ICT) investment on employment and other economic variables according to firms"ownership. We present two computable general equilibrium models (with full employment and with unemployment) which differentiate two types of firms: National and foreign multinationals (MNEs). Both types of firms allow for the substitution between labour and ICT capital. We conclude that ICT investments significantly create jobs and raise real wages, GDP and welfare. The aggregate positive effects are stronger for ICT investment in national firms than in foreign MNEs although the sign of some sectoral effects can be negative. We also analyze the role of wage flexibility in this context, with the most favorable results related to scenarios where wages are more rigid for both cases, when investors are national firms or foreign MNEs. The model is applied to the case of Spain, a country with a high unemployment rate where ICT investment has been large since the mid 1990s. © 2019 Oldenbourg Wissenschaftsverlag GmbH, Published by De Gruyter Oldenbourg, Berlin/Boston 2019.


Item Type:Article
Uncontrolled Keywords:Computable general equilibrium; Investment; Information and communications technologies; Employment; Multinationals.
Subjects:Social sciences > Economics
Social sciences > Economics > Business enterprises
ID Code:60784
Deposited On:05 Jun 2020 08:31
Last Modified:26 Jul 2020 23:01

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