Why Foreign Ownership May be Good for You

Hartmut Egger () and Udo Kreickemeier

Chapter 13 in International Trade and Labor Markets:Welfare, Inequality and Unemployment, 2017, pp 381-421 from World Scientific Publishing Co. Pte. Ltd.

Abstract: We develop a two-country model with heterogeneous producers and rent sharing at the firm level. We identify two sources of a multinational wage premium: A composition pay higher wages, and a firm-level wage effect, because a firm makes higher global profits and thus pays higher wages in its home market when becoming multinational. With two identical countries, the wage premium is fully explained by firm characteristics. Allowing for technology differences between countries, a residual wage premium exists in the technologically backward country, but not in the advanced country.

Keywords: International Trade; Inequality; Labor Markets; Unemployment; Offshoring (search for similar items in EconPapers)
JEL-codes: J01 (search for similar items in EconPapers)
Date: 2017
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Related works:
Journal Article: WHY FOREIGN OWNERSHIP MAY BE GOOD FOR YOU (2013)
Working Paper: Why Foreign Ownership May be Good for You (2011)
Working Paper: Why foreign ownership may be good for you (2011)
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