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Cross-Border Acquisitions, Multinationals and Wage Elasticities

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  • Hakkala, Katariina

    (Research Institute of Industrial Economics (IFN))

  • Heyman, Fredrik

    (Research Institute of Industrial Economics (IFN))

  • Sjöholm, Fredrik

    (Research Institute of Industrial Economics (IFN))

Abstract

The growing number of cross-border acquisitions has in many countries raised concerns about labor demand consequences. In this study, we use detailed firm level data to examine how increased internationalization and multinational activity affect the volatility of employment, or rather, the wage elasticity of labor demand. We analyze whether the wage elasticity of labor demand differs between multinational and non-multinational firms as well as between foreign-owned and domestic firms, and we are able to distinguish between different skill groups of employees. Moreover, we separate between an acquisition effect and a general ownership effect. Our results do not show any general difference in wage elasticities between different types of firms.

Suggested Citation

  • Hakkala, Katariina & Heyman, Fredrik & Sjöholm, Fredrik, 2007. "Cross-Border Acquisitions, Multinationals and Wage Elasticities," Working Paper Series 709, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0709
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    References listed on IDEAS

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    Cited by:

    1. Koskela, Erkki & Poutvaara, Panu, 2009. "Is There Scope for Gains from Revenue-Neutral Labor Tax Reforms with Flexible Outsourcing?," IZA Discussion Papers 3984, Institute of Labor Economics (IZA).
    2. Agnese, Pablo, 2009. "Japan and her dealings with offshoring: An empirical analysis with aggregate data," MPRA Paper 16505, University Library of Munich, Germany.
    3. Hijzen, Alexander & Swaim, Paul, 2010. "Offshoring, labour market institutions and the elasticity of labour demand," European Economic Review, Elsevier, vol. 54(8), pages 1016-1034, November.
    4. Bertrand, Olivier & Betschinger, Marie-Ann, 2012. "Performance of domestic and cross-border acquisitions: Empirical evidence from Russian acquirers," Journal of Comparative Economics, Elsevier, vol. 40(3), pages 413-437.

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    More about this item

    Keywords

    FDI; Cross-Border Acquisitions; Multinational Enterprises; Foreign Ownership; Labor Demand; Skill Groups; GMM;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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