"Multinationals and Varieties of Capitalism: When U.S. Giants Stepped into the Swiss Coordinated Labor Market in the 1950s"

This paper investigates unintended consequences of US FDI in Switzerland: the increased competition that US firms generated within the national labor market and the challenge their hiring practices constituted for the institutional settings in which labor relations were embedded. As we shall see, at a time when the Swiss economy was booming and the unemployment rate was close to zero, the side effect of the arrival of US multinationals, triggered by fiscal incentives, was that it dramatically contributed to depleting the job market, especially with respect to engineers and qualified administrative staff. Moreover, Swiss labor relations were embedded in specific institutional arrangements, marked by business-labor negotiations, the importance of skilled labor, and reliance on a foreign workforce to fulfill labor demand in the less competitive sectors of the economy. To provide insights on the tensions US FDI generated, this paper relies on historical sources from the Swiss Federal Archives and from the Swiss Federation of Commerce and Industry, which was a peak business association that mainly represented the interests of the Swiss export industry. Additionally, documents from the Swiss Federal Archives proved useful in understanding the Swiss central administration’s approach and the extent to which it diverged from the fiscal attraction strategies of the Swiss cantons than is much better acknowledged in the existing literature.