How do multinational firms affect both the demand for and supply of skills in host country labour markets? On the demand side, inward FDI can stimulate demand for skilled workers in host countries through several channels. Most empirical evidence indicates that these channels work mainly within...

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...