We analyze a model where a multinational firm can use its superior technology in a foreign subsidiary only after appropriate training of local managers. Technological spillovers from foreign direct investment arise when such managers are later hired by a local firm. Benefits for the host economy...

We investigate how internal labor markets (ILMs) affect labor adjustments and performance in business groups. We show that group-affiliated units faced with positive shocks to growth opportunities rely on the ILM to ensure swift hiring, especially of managers and other high-skilled workers. A...