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Cross-Border Merger and Acquisition Activity and Wage Dynamics

Author

Listed:
  • Gianluca Orefice
  • Nicholas Sly
  • Farid Toubal

Abstract

Using detailed administrative data that link French firms and workers over the years 2002 to 2007, the authors document declines in worker-level wages ahead of the time their employer is acquired by a foreign firm that are more than offset by gains in wages that emerge after cross-border acquisition. Specifically, relative wages fall by an estimated 7.5% in the years just before foreign acquisition, and they rise by approximately 12.5% in the years afterward. Changes in workers’ earnings are evident in both wages and in-kind payments given to workers. Moreover, the authors provide theoretical foundations for the conditional mean independence assumption that underlies commonly applied empirical techniques.

Suggested Citation

  • Gianluca Orefice & Nicholas Sly & Farid Toubal, 2021. "Cross-Border Merger and Acquisition Activity and Wage Dynamics," ILR Review, Cornell University, ILR School, vol. 74(1), pages 131-162, January.
  • Handle: RePEc:sae:ilrrev:v:74:y:2021:i:1:p:131-162
    DOI: 10.1177/0019793919839031
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    References listed on IDEAS

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