The employment activities of foreign-owned firms may affect local labour market conditions through their impact on labour demand and supply. New entry of foreign firms or the expansion of activities in foreign firms may raise local labour demand, thereby bidding up local wages. To the extent that foreign firms tend to pay higher wages, FDI may also reduce the supply of labour available to domestic firms by lowering the willingness of individuals to work for such firms. This would also have a tendency to raise wages in domestic firms.