The transfer of workers within multinationals and ownership of foreign affiliates

We study the variation in ownership shares across affiliates of the same multinational firm. Using the micro-level data on foreign affiliates of South Korean multinationals, we construct a proxy for the headquarter intangible asset using transferred Korean workers from the parent to the affiliate. Our results show a strong relationship with the parent ownership share even after controlling for the parent fixed effect. Our empirical evidence thus extends support for the theory on multinational firm boundaries at the micro-level.