From Local to Global: How Foreign Acquisitions Reshape Job Mobility

This paper explores the impact of experience in foreign-owned firms on worker mobility, with a focus on Swedish companies acquired by foreign multinationals. We posit that international experience, by imparting knowledge about foreign operations, enhances an employee’s appeal to multinational enterprises (MNEs). By matching acquired firms with comparable control firms and using a stacked difference-in-differences estimation methodology, we observe a significant impact of foreign acquisitions on job mobility. Our results indicate that foreign acquisitions raise the likelihood of a job switch to an MNE by 3.6 percentage points, while concurrently decreasing the probability of a switch to a local firm by around 4 percentage points. Furthermore, the postacquisition wage growth rate is significantly higher for workers transitioning to MNEs compared to those remaining at the acquired firms, suggesting a steeper wage growth trajectory for employees moving to MNEs. Additional analyses reveal that the positive effect on mobility to MNEs is linked to learning opportunities stemming from increased trade linkages within multinational production networks and the implementation of advanced technologies after an acquisition.