Unit labour costs and manufacturing returns

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bachelor_Kataikko_Tuomas_2020.pdf (244.11 KB)
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Journal ISSN
Volume Title
School of Business | Bachelor's thesis
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Author
Date
2020
Department
Rahoituksen laitos
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
23
Series
Abstract
I use quarterly data from the most recent 19 years to assess the existence of two hypothetical effects: a relationship between unit labour cost changes and manufacturing returns, and an effect, where offshoring firms produce higher returns than domestic counterparts. I construct a simple linear regression model using OLS estimation, and compare manufacturing results with a control group of finance returns, both analysed with the same model. The results are mixed: unit labour costs affect both samples’ returns inversely and significantly, but the finance sample’s results are weaker. In light of the results, I argue, that unit labour cost variations affect manufacturing returns particularly strongly. The second hypothesis of higher returns for offshoring firms cannot be confirmed: the results give indications of the effect, but aren’t significant.
Description
Thesis advisor
Shin, Sean
Keywords
unit labour costs, manufacturing returns, offshoring, domestic, productivity, labour costs
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Citation
Permanent link to this item
https://urn.fi/URN:NBN:fi:aalto-202101241299
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[kand] Kauppakorkeakoulu / BIZ (Open Access)