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International Rent Sharing in Multinational Firms Author info | Abstract | Publisher info | Download info | Related research | Statistics John W. Budd ()
Jozef Konings ()
Matthew J. Slaughter ()
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We use a unique firm-level panel data set of multinational parents and their foreign affiliates to analyze 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 and parent profitability. The elasticity of affiliate wages to parent profits per worker is approximately 0.03, which can explain over 20 percent of the observed variation in affiliate wages. These results reveal a previously ignored aspect of labor market rent sharing. They also reveal an important micro-level linkage with potential macro-level implications. International rent sharing can transmit economic conditions across national borders, and can thereby provide an implicit cross-country risk-sharing mechanism.
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Paper provided by Industrial Relations Center, University of Minnesota (Twin Cities Campus) in its series Working Papers with number
0202.
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Paper John W. Budd & Josef Konings & Matthew J. Slaughter, 2002.
"International Rent Sharing in Multinational Firms ,"
NBER Working Papers
8809, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Budd, John W & Konings, Jozef & Slaughter, Matthew, 2002.
"International Rent Sharing in Multinational Firms ,"
CEPR Discussion Papers
3326, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) 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
This paper has been announced in the following NEP Reports :
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