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International Rent Sharing in Multinational Firms Author info | Abstract | Publisher info | Download info | Related research | Statistics Budd, John W
Konings, Jozef
Slaughter, Matthew
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We use a unique firm-level panel data set of multinational parents and their foreign affiliates to analyse whether profits are shared across borders within multinational firms. Using both fixed-effects and generalized method-of-moments estimators, affiliate wage levels are estimated to respond to both affiliate and parent profitability. The elasticity of affiliate wages to parent profits per worker is approximately 0.03, which can explain over 20% of observed variation in affiliate wages. These results reveal a previously ignored aspect of labour-market rent sharing. They also reveal an important micro-level linkage that can transmit economic conditions across national borders and that can provide an implicit cross-country risk-sharing mechanism.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
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Date of creation: Apr 2002Date of revision:
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Keywords: multinational firms ; profit sharing ; Other versions of this item:
Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.) This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page .
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