Multinational firms are believed to impact the productivity of domestic
firms through worker mobility. Fosfuri et al. (J Int Econ 53:205–222, 2001) suggest
that worker mobility and technological spillovers are more likely to materialize
when the local and the multinational firm do not compete fiercely in the product
market. We assess empirically the importance of the hypothesis by using the Finnish
longitudinal employer–employee data. Consistent with the predictions of the model,
we find that competition is negatively related to worker mobility but only in hightech
industries where productivity spillovers are present. Thus, our results detail a
channel through which competition may negatively affect the productivity of purely
domestic firms .

• Multinationals, competition and productivity spillovers through worker mobility