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Is There Really a Foreign Ownership Wage Premium? Evidence from Matched Employer-Employee Data

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  • Heyman, Fredrik

    ()
    (Research Institute of Industrial Economics)

  • Gustavsson Tingvall, Patrik

    ()
    (Stockholm School of Economics)

  • Sjöholm, Fredrik

    ()
    (Stockholm School of Economics)

Abstract

Numerous studies on firm-level data have reported higher average wages in foreign-owned firms than in domestically-owned firms. This, however, does not necessarily imply that the individual worker’s wage increase with foreign ownership. Using detailed matched employer-employee data on the entire Swedish private sector, we examine the effect of foreign ownership on individual wages, controlling for individual and firm heterogeneity as well as for possible selection bias in foreign acquisitions. We distinguish between foreign greenfields and takeovers and compare foreign owned firms with both domestic multinationals and local firms. Our results show a considerably smaller wage premium in foreign owned firms than what has been found in studies conducted at a more aggregate level. Moreover, foreign takeovers of Swedish firms tend to have no or even a negative effect on wages.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 674.

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Length: 36 pages
Date of creation: 14 Nov 2006
Date of revision:
Publication status: Published in Journal of International Economics, 2007, pages 355-376.
Handle: RePEc:hhs:iuiwop:0674

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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Keywords: FDI; Foreign Ownership; Wages; Matched Employer-Employee Data; Propensity Score Matching;

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