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• 1. [Article] The relationship of absentee ownership of manufacturing plants to income growth, income inequality and employment instability in Oregon

  Absentee-owned manufacturing plants made up a significant portion of the manufacturing sector in Oregon. In both 1969 and 1979, more than a quarter of the state's wage and salary manufacturing workers ...

  Citation × Citation Citation Abstract Copy Title: The relationship of absentee ownership of manufacturing plants to income growth, income inequality and employment instability in Oregon Author: Mandelbaum, Thomas B. Absentee-owned manufacturing plants made up a significant portion of the manufacturing sector in Oregon. In both 1969 and 1979, more than a quarter of the state's wage and salary manufacturing workers were employed by manufacturers whose home offices were located in other states or nations. Although the orthodox economic view suggests that absentee-owned plants will provide widespread benefits, others argue that the presence of such firms leads to adverse economic changes in the host economies in which the plants operate. In order to investigate some of these changes, the empirical relationship of absentee ownership to income growth, income inequality, and employment instability were analyzed. Two measures of absentee ownership were used: the level of manufacturing employment In absentee-owned plants and the proportion of all manufacturing employees in absentee-owned plants in Oregon counties and SMSAs. The different measures of absentee ownership reflect different assumptions regarding the most likely alternative in the absence of absentee-owned plants. The level of employment in absentee-owned plants was used to analyze the hypothesized impacts under the assumption that absentee-owned plants are a net addition to the economy, displacing no indigenous manufacturers. The effects are referred to as "absolute" impacts. The "relative" effects were investigated through the application of models that include measures of the proportion of manufacturing employment In absentee-owned plants. These models reflect the assumption that absentee-owned firms completely displace locally owned manufacturers. If this assumption is adopted it is appropriate to compare the effects of absentee-owned firms to the impacts of indigenous firms that would have otherwise existed. Several cross-sectional multiple regression models were specified to investigate either the absolute or relative impacts of absentee ownership on income growth. The results provided no strong evidence that absentee ownership affects income growth In Oregon counties. It is concluded from a partial correlation analysis that the level of absentee ownership in a county was not significantly related to income inequality. But compared to local ownership, absentee ownership was significantly associated with a larger share of Income for middle income families and a smaller share for the highest income families. From the results of a multiple regression analysis of the relationship between absentee ownership and employment instability, It was concluded that, compared to local ownership, absentee ownership of manufacturers was significantly associated with less employment instability. The arguments of the orthodox theorists are more consistent with the results than those of the critical social scientists. None of the findings indicated that absentee ownership was associated with adverse economic impacts on the host economy. The results suggest that if the goals of economic development efforts are to decrease instability and equalize the income distribution, then the present policy of industrial attraction practiced in Oregon may be generally appropriate. Title: The relationship of absentee ownership of manufacturing plants to income growth, income inequality and employment instability in Oregon Author: Mandelbaum, Thomas B. Absentee-owned manufacturing plants made up a significant portion of the manufacturing sector in Oregon. In both 1969 and 1979, more than a quarter of the state's wage and salary manufacturing workers were employed by manufacturers whose home offices were located in other states or nations. Although the orthodox economic view suggests that absentee-owned plants will provide widespread benefits, others argue that the presence of such firms leads to adverse economic changes in the host economies in which the plants operate. In order to investigate some of these changes, the empirical relationship of absentee ownership to income growth, income inequality, and employment instability were analyzed. Two measures of absentee ownership were used: the level of manufacturing employment In absentee-owned plants and the proportion of all manufacturing employees in absentee-owned plants in Oregon counties and SMSAs. The different measures of absentee ownership reflect different assumptions regarding the most likely alternative in the absence of absentee-owned plants. The level of employment in absentee-owned plants was used to analyze the hypothesized impacts under the assumption that absentee-owned plants are a net addition to the economy, displacing no indigenous manufacturers. The effects are referred to as "absolute" impacts. The "relative" effects were investigated through the application of models that include measures of the proportion of manufacturing employment In absentee-owned plants. These models reflect the assumption that absentee-owned firms completely displace locally owned manufacturers. If this assumption is adopted it is appropriate to compare the effects of absentee-owned firms to the impacts of indigenous firms that would have otherwise existed. Several cross-sectional multiple regression models were specified to investigate either the absolute or relative impacts of absentee ownership on income growth. The results provided no strong evidence that absentee ownership affects income growth In Oregon counties. It is concluded from a partial correlation analysis that the level of absentee ownership in a county was not significantly related to income inequality. But compared to local ownership, absentee ownership was significantly associated with a larger share of Income for middle income families and a smaller share for the highest income families. From the results of a multiple regression analysis of the relationship between absentee ownership and employment instability, It was concluded that, compared to local ownership, absentee ownership of manufacturers was significantly associated with less employment instability. The arguments of the orthodox theorists are more consistent with the results than those of the critical social scientists. None of the findings indicated that absentee ownership was associated with adverse economic impacts on the host economy. The results suggest that if the goals of economic development efforts are to decrease instability and equalize the income distribution, then the present policy of industrial attraction practiced in Oregon may be generally appropriate. Close