NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

International Rent Sharing in Multinational Firms

John W. Budd, Josef Konings, Matthew J. Slaughter

NBER Working Paper No. 8809
Issued in February 2002
NBER Program(s):   ITI

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 affiliate 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.

download in pdf format
   (198 K)

email paper

This paper is available as PDF (198 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8809

Published: Budd, John W., Jozef Konings, and Matthew J. Slaughter. "Wages and International Rent Sharing in Multinational Firms." Review of Economics and Statistics 87, 1 (February 2005): 73-84.

Users who downloaded this paper also downloaded these:
Budd and Slaughter w8014 Are Profits Shared Across Borders? Evidence on International Rent Sharing
Freeman and Schettkat w8797 Marketization of Production and the US-Europe Employment Gap
Goyal and Welch w8788 Predicting the Equity Premium With Dividend Ratios
Cullen, Jacob, and Levitt w7888 The Impact of School Choice on Student Outcomes: An Analysis of the Chicago Public Schools
Bartel, Lach, and Sicherman w11158 Outsourcing and Technological Change
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us