How do Employment Relations influence Multinational Company Location Decisions? US-Subsidiaries in Switzerland, Germany and the UK
Final Report Abstract
Within the project we sought to understand how national systems of employment relations influence MNC location decisions by accessing what types of subsidiaries are located in the three country locations of analysis and what employment relations practices different types of subsidiaries at the different locations use. To address this question, we collected data via a survey. After various reminder techniques and follow-ups, a total of 99 companies answered the questionnaire. Despite the unanticipated low response rate the dataset provides rich information on the state of industrial relations, human resource management and strategic orientation of US subsidiaries in these three countries not found in larger-scale surveys. In addition, we conducted interviews with US subsidiaries in the three locations. Based on this data we did not only provide answers to our initial postulations but in addition addressed a range of related questions pertaining to the employment relations of US subsidiaries in Germany, Switzerland and the UK. We detected evidence that US-MNCs differ to a certain extent in terms of characteristics that can be linked back to employment relations comparative advantages of different host-countries. We assessed this via country level US-MNC comparisons in terms of not only subsidiary characteristics but also subsidiaries’ average use of host-country employment relations practices; and by differentiating between subsidiaries of different change-intensity and their employment relations practices. Furthermore, given that not only one type of subsidiary is located in the different country locations, we further investigated how subsidiaries that should profit more or less from their host-country employment relations use host-country employment relations. We found evidence for more host-country employment relations practices use by subsidiaries that should be able to profit more from the host-country. Thus, certain MNCs and their subsidiary location decisions appear more prone to be influenced by host-country employment relations than others, and countries could potentially utilize their comparative advantage in this regard by seeking to attract specific types of investments. This links to further understanding the role that parent-company staff at the subsidiaries play, which we have additionally begun to investigate.
