Random-Coefficients Logit Demand Estimation with Zero-Valued Market Shares

Many employers link wages at the firmOs establishments outside of the home region to the level at headquarters. Multinationals that anchor-to-the headquarters also transmit wage changes arising from shocks to minimum wages and exchange rates in the home country/state to their foreign establishments. Such multinationals fire more low-skill workers and hire fewer new workers abroad after a permanent (minimum wage-induced) foreign establishment wage increase originating in shocks to headquarter wages, but not after a temporary (exchange rate-induced) one. We show this using data on 1,060 multinationalsO establishments across the world and in employee-level data on the same employersO establishments in Brazil.