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Foreign Ownership, Labour Mobility and Wages’, mimeo, Helsinki School of Economics (2006)
| Citations: | 5 - 0 self |
BibTeX
@MISC{Pesola06foreignownership,,
author = {Hanna Pesola and Hanna Pesola},
title = {Foreign Ownership, Labour Mobility and Wages’, mimeo, Helsinki School of Economics},
year = {2006}
}
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Abstract
There is a multitude of empirical research attempting to measure the effects of foreign direct investment, including the extent of spillovers from foreign owned to domestic firms. However, the mechanisms through which these spillovers occur have not received as much attention. One of the potential channels for spillovers of technological, marketing or managerial knowledge from foreign owned to purely domestic firms is labour mobility. Workers may benefit from such a spillover process if they manage to appropriate part of the return to the knowledge of the foreign owned firm. The ability to transfer knowledge and thereby benefit from it may depend on the skill level of an employee. This paper uses Finnish linked employer-employee panel data to analyse the extent to which employees benefit from knowledge they acquire in foreign owned firms and whether educational background makes a difference in this process. The possibility that employees may pay for the accumulation of this knowledge, as well as the potential for “reverse spillovers ” i.e. knowledge diffusion from domestic to foreign owned firms are also considered. The estimates indicate that highly educated employees earn a return to prior experience in a
