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The takeover and selection effects of foreign ownership in Germany: an analysis using linked worker-firm data

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Author Info
Martyn Andrews,
Lutz Bellmann,
Thorsten Schank,
Richard Upward

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Abstract

We use a linked employer-employee data set from Germany to estimate the wage effect of foreign-affiliates in (the former) East and West Germany . In addition, the wage effects of the large number of West German affiliates which are located in East Germany are also considered. The implemented techniques allow us to control both for worker- and plant-level unobserved components of earnings. We find large selection effects both in terms of worker- and firm unobserved components of wages. The selection effect is larger for East German plants. Once the selection effect is taken into account, the genuine takeover effect is small and in some cases insignificantly different from zero. In contrast to the selection effect, the takeover effect is slightly larger in West Germany , where it amounts to 2.7%.

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Paper provided by University of Nottingham, GEP in its series Discussion Papers with number 07/08.

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Handle: RePEc:not:notgep:07/08

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Related research
Keywords: Foreign ownership; wages; linked employer-employee data;

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  1. Pedro S. Martins, 2008. "Paying More to Hire the Best? Foreign Firms, Wages and Worker Mobility," Working Papers 17, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research. [Downloadable!]
    Other versions:
  2. Pedro S. Martins & Luiz A. Esteves, 2008. "Foreign Ownership, Employment and Wages in Brazil: Evidence from Acquisitions, Divestments and Job Movers," Working Papers 15, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research. [Downloadable!]
    Other versions:
  3. Csengödi, Sándor / Urban, Dieter M., 2008. "Foreign Takeovers and Wage Dispersion in Hungary," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. Anna Karolina Selhorst Bezerra & Luciano Nakabashi, 2008. "O Programa Comunidade Escola e seus impactos sobre a violência entre Crianças e Jovens," Working Papers 0076, Universidade Federal do Paraná, Department of Economics. [Downloadable!]
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