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Acquisitions, Multinationals, and Wage Dispersion

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  • Heyman, Fredrik

    (European Institute of Japanese Studies)

  • Sjöholm, Fredrik

    ()
    (European Institute of Japanese Studies)

  • Gustavsson Tingvall, Patrik

    ()
    (European Institute of Japanese Studies)

Abstract

Multinational firms pay relatively high wages. Less is known about the wage structure within multinational and non-multinational firms. We examine the impact of acquisitions on wage dispersion in Sweden using a large matched employer-employee data set. Foreign acquisitions of Swedish firms increase wage dispersion by increasing wages for high-skilled workers. The positive impact is concentrated to CEOs and managers, whereas other groups are either negatively affected or not affected at all. The impact on high-skilled workers’ wages seems to be caused by the acquisition rather than the ownership itself, since ownership changes from foreign to Swedish result in similar increases.

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Bibliographic Info

Paper provided by The European Institute of Japanese Studies in its series EIJS Working Paper Series with number 222.

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Length: 28 pages
Date of creation: 10 Jan 2006
Date of revision:
Handle: RePEc:hhs:eijswp:0222

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Postal: The European Institute of Japanese Studies, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
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Fax: +46-8-313017
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Web page: http://www.hhs.se/eijs/
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Keywords: FDI; Multinational Companies; Foreign ownership; Wage-Dispersion; Skill groups; Matched Employer-Employee data;

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References

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  1. Heyman, Fredrik & Sjöholm, Fredrik & Gustavsson Tingvall, Patrik, 2004. "Is There Really A Foreign Ownership Wage Premium?Evidence From Matched Employer-Employee Data," EIJS Working Paper Series 206, The European Institute of Japanese Studies.
  2. Taylor, Karl & Driffield, Nigel, 2005. "Wage inequality and the role of multinationals: evidence from UK panel data," Labour Economics, Elsevier, vol. 12(2), pages 223-249, April.
  3. Robert E. Lipsey, 2004. "Home- and Host-Country Effects of Foreign Direct Investment," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 333-382 National Bureau of Economic Research, Inc.
  4. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, December.
  5. Bruce A. Blonigen & Matthew J. Slaughter, 2001. "Foreign-Affiliate Activity And U.S. Skill Upgrading," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 362-376, May.
  6. Francine D. Blau & Lawrence M. Kahn, 1994. "International Differences in Male Wage Inequality: Institutions versus Market Forces," NBER Working Papers 4678, National Bureau of Economic Research, Inc.
  7. Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.
  8. Karpaty, Patrik & Lundberg, Lars, 2004. "Foreign Direct Investment and Productivity Spillovers in Swedish Manufacturing," Working Paper Series 194, Trade Union Institute for Economic Research.
  9. Markusen, James R. & Venables, Anthony J., 1998. "Multinational firms and the new trade theory," Journal of International Economics, Elsevier, vol. 46(2), pages 183-203, December.
  10. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
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  12. Martin J. Conyon & Sourafel Girma & Steve Thompson & Peter W. Wright, 2004. "Do Wages Rise or Fall Following Merger?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(5), pages 847-862, December.
  13. Girma, Sourafel & Görg, Holger, 2003. "Evaluating the Causal Effects of Foreign Acquisition on Domestic Skilled and Unskilled Wages," IZA Discussion Papers 903, Institute for the Study of Labor (IZA).
  14. Edwin Leuven & Barbara Sianesi, 2003. "PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing," Statistical Software Components S432001, Boston College Department of Economics, revised 12 Feb 2014.
  15. Görg, Holger & Greenaway, David, 2003. "Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?," IZA Discussion Papers 944, Institute for the Study of Labor (IZA).
  16. Andrei Shleifer & Lawrence H. Summers, 1987. "Breach of Trust in Hostile Takeovers," NBER Working Papers 2342, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Heyman, Fredrik & Svaleryd, Helena & Vlachos, Jonas, 2008. "Competition, Takeovers and Gender Discrimination," Working Paper Series 734, Research Institute of Industrial Economics.
  2. Lundan, Sarianna M., 2007. "The Home Country Effects of Internationalisation," Discussion Papers 1100, The Research Institute of the Finnish Economy.
  3. Sándor Csengödi & Dieter M. Urban, 2008. "Foreign Takeovers and Wage Dispersion in Hungary," CESifo Working Paper Series 2188, CESifo Group Munich.
  4. Earle, John S. & Telegdy, Álmos & Antal, Gábor, 2012. "FDI and Wages: Evidence from Firm-Level and Linked Employer-Employee Data in Hungary, 1986-2008," IZA Discussion Papers 7095, Institute for the Study of Labor (IZA).
  5. John S. Earle & Almos Telegdy & Gabor Antal, 2012. "FDI and Wages: Evidence from Firm-Level and Linked Employer-Employee Data in Hungary, 1986-2008," Budapest Working Papers on the Labour Market 1209, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.

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