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Acquisitions, Multinationals and Wage Dispersion

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Author Info

  • Heyman, Fredrik

    ()
    (Research Institute of Industrial Economics)

  • Gustavsson Tingvall, Patrik

    ()
    (Stockholm School of Economics)

  • Sjöholm, Fredrik

    ()
    (Stockholm School of Economics)

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 Research Institute of Industrial Economics in its series Working Paper Series with number 675.

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Length: 28 pages
Date of creation: 21 Nov 2006
Date of revision:
Publication status: Forthcoming as Heyman, Fredrik, Patrik Gustavsson Tingvall and Fredrik Sjöholm, 'Acquisitions, Multinationals and Wage Dispersion' in Canadian Journal of Economics.
Handle: RePEc:hhs:iuiwop:0675

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Email:
Web page: http://www.ifn.se/
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Related research

Keywords: FDI; Multinational Companies; Foreign Ownership; Wage-Dispersion; Skill Groups; Matched Employer-Employee Data;

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References

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  1. Markusen, James R., 2002. "Multinational Firms and the Theory of International Trade," MPRA Paper 8380, University Library of Munich, Germany.
  2. 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.
  3. Holger Görg & David Greenaway, 2004. "Much Ado about Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?," World Bank Research Observer, World Bank Group, vol. 19(2), pages 171-197.
  4. Bruce A. Blonigen & Matthew J. Slaughter, 1999. "Foreign-Affiliate Activity and U.S. Skill Upgrading," NBER Working Papers 7040, National Bureau of Economic Research, Inc.
  5. 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.
  6. 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.
  7. 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.
  8. Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.
  9. Heyman, Fredrik & Gustavsson Tingvall, Patrik & Sjöholm, Fredrik, 2006. "Is There Really a Foreign Ownership Wage Premium? Evidence from Matched Employer-Employee Data," Working Paper Series 674, Research Institute of Industrial Economics.
  10. 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).
  11. Karpaty, Patrik & Lundberg, Lars, 2004. "Foreign Direct Investment and Productivity Spillovers in Swedish Manufacturing," Working Paper Series 194, Trade Union Institute for Economic Research.
  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. Francine D. Blau & Lawrence M. Kahn, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," NBER Working Papers 4678, National Bureau of Economic Research, Inc.
  14. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
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Citations

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Cited by:
  1. Fredrik Heyman & Helena Svaleryd & Jonas Vlachos, 2013. "Competition, Takeovers, and Gender Discrimination," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 66(2), pages 409-432, April.
  2. 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.
  3. 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).
  4. Lundan, Sarianna M., 2007. "The Home Country Effects of Internationalisation," Discussion Papers 1100, The Research Institute of the Finnish Economy.
  5. Sándor Csengödi & Dieter M. Urban, 2008. "Foreign Takeovers and Wage Dispersion in Hungary," CESifo Working Paper Series 2188, CESifo Group Munich.

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