The effects of foreign multinationals on workers and firms in Brazil

• Ano de defesa: 2025
• Autor(a) principal: Santos, Rayne Aparecida Alves
• Tipo de documento: Dissertação
• Tipo de acesso: Acesso aberto
• Idioma: eng
• Instituição de defesa: Biblioteca Digitais de Teses e Dissertações da USP
• Palavras-chave em Português: Brasil; Brazil; Efeito detransbordamento; Foreign multinationals; Mutilnacional estrangeira; Prêmio salarial; Spillover effect; Wage premium
• Link de acesso: https://www.teses.usp.br/teses/disponiveis/12/12138/tde-25082025-162914/

A wide body of research shows that foreign multinationals tend to pay higher wages than domestic firms. However, for Brazil, concrete evidence on these effects remains scarce. We use a newly constructed database that identifies foreign multinational firms and combine it with matched employer-employee panel data from Brazils formal labor market (RAIS), covering the period from 2011 to 2018, to estimate direct and indirect effects of foreign multinationals in Brazil. We employ an AKM framework, correcting for limited mobility bias, to estimate the foreign wage premium. To assess how domestic firms respond to foreign presence, we adapt the literature on the effects of immigration on non-immigrants to construct an instrumental variable for identifying indirect effects. Our results show that workers employed by foreign MNEs earn, on average, 13.6% more than at domestic firms. In contrast, we find limited evidence of indirect effects on domestic firms employment and wage bill responses. The indirect effects we do observe are restricted to wages, concentrated at the upper end of the wage distribution, and emerge only in microregions with higher labor market formality. This paper contributes to the debate on inequality in Brazil and, to our knowledge, is the first to apply the innovative methodology of Setzler and Tintelnot (2021) to distinguish the effects of foreign MNEs in a developing country context.