The Productivity of Unskilled Labor in Multinational Subsidiaries from Di¤erent Sources

Abstract: Currently, multinational corporations (MNCs) from both developed and emerg-ing economies build subsidiaries in developing countries to take advantage of the resident cheap unskilled labor. Using data from the Chinese electronics industry, this paper \u85nds that, despite the great di¤erences between developed and emerging economies, the productivity of unskilled labor employed by MNCs of both types of economy shows no di¤erence. This paper also \u85nds suggestive evidence that the productivity of skilled labor is higher in the subsidiaries from developed economies