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Foreign ownership and effects on employment and wages: The case of Sweden

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Author Info
Brännlund, Runar () (Department of Economics, Umeå University)
Nordström, Jonas () (Department of Economics, Umeå University)
Svedin, Dick () (Department of Social Science, Mid Sweden University)

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Abstract

In this paper we study how foreign ownership of Swedish companies affect employment and wage setting. To study the effects we specify a model that is essentially based on the assumption that the Swedish labour market can be described as a market where trade unions and employers bargain over both wage and employment. Our hypothesis is that the bargaining power is affected by institutional settings and the ownership of the firm. The data we used to test our hypothesis is a panel data set including nearly 200 firms, spanning over the period 1980-1994. The results indicate that foreign ownership has no significant effect on employment, whereas the effect on wages is significantly positive.

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Publisher Info
Paper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 638.

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Length: 22 pages
Date of creation: 30 Jun 2004
Date of revision: 01 Nov 2004
Handle: RePEc:hhs:umnees:0638

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Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
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Web page: http://www.econ.umu.se/
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Related research
Keywords: Bargaining power; foreign direct investment; employment; trade union; wages.;

Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Alogoskoufis, George & Manning, Alan, 1991. "Tests of alternative wage employment bargaining models with an application to the UK aggregate labour market," European Economic Review, Elsevier, vol. 35(1), pages 23-37, January. [Downloadable!] (restricted)
  2. Aitken, Brian & Harrison, Ann & Lipsey, Robert E., 1996. "Wages and foreign ownership A comparative study of Mexico, Venezuela, and the United States," Journal of International Economics, Elsevier, vol. 40(3-4), pages 345-371, May. [Downloadable!] (restricted)
    Other versions:
  3. Minsik Choi, 2001. "Threat Effect of Foreign Direct Investment on Labor Union Wage Premium," Working Papers wp27, Political Economy Research Institute, University of Massachusetts at Amherst. [Downloadable!]
  4. Bughin, Jacques & Vannini, Stefano, 1995. "Strategic direct investment under unionized oligopoly," International Journal of Industrial Organization, Elsevier, vol. 13(1), pages 127-145, March. [Downloadable!] (restricted)
  5. Robin Naylor & Michele Santoni, 2003. "Foreign direct investment and wage bargaining," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 12(1), pages 1-18, March. [Downloadable!] (restricted)
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  6. Robert E. Lipsey, 1994. "Foreign-Owned Firms and U.S. Wages," NBER Working Papers 4927, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Vannetelbosch, Vincent J., 1996. "Testing between alternative wage-employment bargaining models using Belgian aggregate data," Labour Economics, Elsevier, vol. 3(1), pages 43-64, August. [Downloadable!] (restricted)
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  8. Manning, Alan, 1987. "An Integration of Trade Union Models in a Sequential Bargaining Framework," Economic Journal, Royal Economic Society, vol. 97(385), pages 121-39, March. [Downloadable!] (restricted)
  9. Hausman, Jerry A., 1983. "Specification and estimation of simultaneous equation models," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 1, chapter 7, pages 391-448 Elsevier. [Downloadable!] (restricted)
  10. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December. [Downloadable!] (restricted)
  11. Hatzius, Jan, 2000. "Foreign direct investment and factor demand elasticities," European Economic Review, Elsevier, vol. 44(1), pages 117-143, January. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Bandick, Roger & Karpaty, Patrick, 2007. "Foregin Acquisition and Employment Effects in Swedish Manufacturing," Working Papers 2007:10, Örebro University, Swedish Business School. [Downloadable!]
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