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Factor Prices and Factor Substitution in U.S. Firms' Manufacturing Affiliates Abroad
Using confidential individual firm data from the Bureau of Economic Analysis survey of U.S. firms' manufacturing operations abroad, we investigate the determinants of capital intensity in affiliate operations. Host country labor cost, the scale of host country production, and the capital intensity of the parent firm's production in the United States, are all significant influences. The parent's capital intensity is the strongest and most consistent determinant of affiliate capital intensity.doi:10.3386/w10442 fatcat:ze4ui3wh3nditbsigxfpqdgaga