, while the most able managers obtain a wage increase, less able managers are faced with a reduction in wages. Hence our model …

affiliate wages to parent profits per worker is approximately 0.03, which can explain over 20 percent of the observed variation … in affiliate wages. These results reveal a previously ignored aspect of labor-market rent sharing. They also reveal an … conditions across national borders, and can thereby provide an implicit cross-country risk-sharing mechanism. -- wages ; profit …