Abstract/Summary

The mobility of workers from multinational enterprises (MNEs) to other local firms is increasingly recognized as an important externality mechanism. However. MNEs have strong incentives to curb this mobility to prevent leakage of firm-specific assets (FSAs). This research note investigates the likelihood and nature of such mobility patterns. Using longitudinal, matched employer-employee data for Sweden with detailed information on individuals, establishments, and firms, we find that workers employed in MNEs are more likely to leave their employers, compared to similar workers employed in non-MNEs with similar characteristics. This effect is particularly strong for high-wage workers and managers. While we find that workers who leave MNEs are more likely to move to other MNEs, our results identify significant mobility toward start-ups, thus leading to important industrial dynamics in the host country. We discuss the implications of these results for research on the externalities from MNEs, and international business theory.