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How International Experience Helps Shape Labor Market Outcomes

Author

Listed:
  • Davidson, Carl

    (Michigan State University)

  • Heyman, Fredrik

    (Research Institute of Industrial Economics (IFN))

  • Matusz, Steven

    (Michigan State University)

  • Sjöholm, Fredrik

    (Research Institute of Industrial Economics (IFN))

  • Chun Zhu, Susan

    (Michigan State University)

Abstract

This paper examines how experience from working in a foreign-owned firm affects worker mobility. International experience can be expected to provide a worker with knowledge about foreign operations, thereby making them more attractive to other employers who are also engaged in international business. We follow workers in local Swedish firms where some experience an internationalization shock when their firm is acquired by a foreign multinational firm. Matching acquired firms with a group of similar control firms and applying a stacked difference-in-differences estimation approach, we find that international experience increases the likelihood of job switching to a multinational firm by around 4 percentage points and decreases the likelihood of job switching to a local firm by around 5 percentage points. Moreover, the post-acquisition wage growth rate is 10 percentage points higher for workers moving to MNEs as compared to stayers at acquired firms, leading to a steeper wage growth trajectory for movers to MNEs.

Suggested Citation

  • Davidson, Carl & Heyman, Fredrik & Matusz, Steven & Sjöholm, Fredrik & Chun Zhu, Susan, 2022. "How International Experience Helps Shape Labor Market Outcomes," Working Paper Series 1453, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1453
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Globalization; Multinational firms; FDI; Job mobility;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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