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The Wage Premium of Foreign Ownership: Evidence from European Mergers and Acquisitions

Author

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  • Oberhofer, Harald
  • Stöckl, Matthias
  • Winner, Hannes

Abstract

The authors provide evidence on the impact of foreign ownership on labor market outcomes analyzing pay differences between foreign-acquired and domestically owned firms. For this purpose, they use firm-level data from 16 European countries over the time period 19992006. Combing propensity score matching techniques with difference-in-differences (DID) estimators the authors estimate positive wage premia of cross-border merger and acquisitions (M&As), suggesting that foreign-acquired firms exhibit higher short-run (post-acquisition) wage growth than their domestic counterparts. The observed wage disparities are most pronounced for low paying firms (with average wages below the median) which are typically located in Eastern European transition economies.

Suggested Citation

  • Oberhofer, Harald & Stöckl, Matthias & Winner, Hannes, 2012. "The Wage Premium of Foreign Ownership: Evidence from European Mergers and Acquisitions," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 6, pages 1-27.
    • Handle: RePEc:zbw:ifweej:201221
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    File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2012-21
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    File URL: https://www.econstor.eu/bitstream/10419/59034/1/717299120.pdf
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    References listed on IDEAS

    as
    1. Paolo Epifani & Gino Gancia, 2009. "Openness, Government Size and the Terms of Trade," Review of Economic Studies, Oxford University Press, vol. 76(2), pages 629-668.
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    Cited by:

    1. Azdejković Dragan & Marković Dušan, 2016. "The Impact Of Cross-Border Acquisitions In Serbia On Productivity, Wages, And Employment," Economic Annals, Faculty of Economics, University of Belgrade, vol. 61(211), pages 47-68, October -.

    More about this item

    Keywords

    foreign Ownership; mergers and acquisitions; wage effects; propensity score matching; difference-in-differences estimator;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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