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Labour Mobility and Returns to Experience in Foreign Firms

This paper uses Finnish linked employer–employee panel data to study whether employees are able to appropriate returns to knowledge accumulated in foreign‐owned firms when moving to domestic firms. The estimates indicate that highly educated employees earn a return to prior experience in a foreign‐owned firm, which is over and above the return to other previous experience. These employees do not appear to pay for the knowledge they accumulate in the form of lower starting wages in foreign‐owned firms.