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Do firms or workers drive the foreign acquisition wage premium?

Author

Listed:
  • Marcus Rösch

    (Erasmus University Rotterdam)

  • Michiel Gerritse

    (Erasmus University Rotterdam)

  • Bas Karreman

    (Erasmus University Rotterdam)

  • Frank van Oort

    (Erasmus University Rotterdam)

  • Bart Loog

    (Statistics Netherlands)

Abstract

We decompose the wage premium after foreign acquisitions of Dutch domestic firms into the con- stituent firm- and worker-level premia. Firm-level premia grow up to 3.5%, accounting for the major- ity of the acquisition premium. Worker-level premia by contrast, grow up to 1% and only materialize with delay, as the acquired firms hire workers with higher earnings capacity than domestic firms. Within firms, premia are also higher for workers with a relatively high earnings capacity. Though in- dustry variation and firm size class heterogeneity is considerable, the dominance of firm-level premia suggests that foreign acquisitions change firms beyond a workforce reshuffling.

Suggested Citation

  • Marcus Rösch & Michiel Gerritse & Bas Karreman & Frank van Oort & Bart Loog, 2022. "Do firms or workers drive the foreign acquisition wage premium?," Tinbergen Institute Discussion Papers 22-014/V, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20220014
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    More about this item

    Keywords

    multinational firms; foreign acquisition; wage components; labor mobility; matched employer-employee data; AKM;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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