As well as their direct effects on output and employment, the attraction of foreign direct investment is sometimes argued to provide further economic benefits through spillover effects that potentially increase the productivity performance of domestic firms. Empirical evidence on these indirect...

We examine the impact of multinational enterprises (MNEs) on labor productivity in two ways: 1) creating high-paying jobs; and 2) improving employees’ human capital. Our analysis is based on a unique database that matches workers to companies, for the 450 largest companies in Israel, during...