The authors of this recent Working paper Frédéric Docquier, Hillel Rapoport highlight the link between low-skill immigration that promotes right-wing populism, which in turn generates adverse skill-selection of immigrants. This creates a vicious circle between negative skill-selection of immigrants and right-wing populism. Structural trends and cyclical shocks such as internet expansion or demographic pressure from poor countries tend to make the vicious circle more likely.

Using a unique global dataset, the authors of this Working paper document key stylized facts: 54% of subsidiaries are controlled through indirect ownership, and ownership chains can span up to seven countries. They develop a structural model in which parent firms compete for control of subsidiaries and, when monitoring is costly, delegate control to an intermediate subsidiary in a strategically chosen location. Empirical evidence confirms that the ease of communication significantly affects the location choice of affiliates along ownership chains. The paper provides new insights into how multinational firms optimize their hierarchical ownership structures to balance control, monitoring, and operational efficiency. Stefania Miricola, Armando Rungi, Gianluca Santoni