Greenfield hires

We investigate the possibility of short-run spillovers from foreign greenfield entry that work through the labor market. We first show that new hires at foreign-owned entrants are positively selected on observables. Moreover,... [ view full abstract ]

We investigate the possibility of short-run spillovers from foreign greenfield entry that work through the labor market. We first show that new hires at foreign-owned entrants are positively selected on observables. Moreover, conditional on observables, new hires to foreign-owned entrants earned a positive
wage premium in their previous job, consistent with additional positive selection on unobservables. We then show that losing workers to a greenfield entrant generates a negative wage spillover for workers at foreign-owned sending plants. Although new hires at foreign-owned entrants are paid a wage premium, we do not find evidence that foreign entry drives up wages for incumbents in a local labor market.