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The Wage Premium of Globalization: Evidence from European Mergers and Acquisitions

Author

Listed:
  • Oberhofer, Harald

    (University of Salzburg)

  • Stöckl, Matthias

    (University of Salzburg)

  • Winner, Hannes

    (University of Salzburg)

Abstract

We provide evidence on the impact of globalization on labor market outcomes analyzing pay differences between foreign-acquired and domestically-owned firms. For this purpose, we use firm level data from 16 European countries over the time period 1999 to 2006. Applying propensity score matching techniques we estimate positive wage premia of cross-boarder merger and acquisitions (M&As), suggesting that foreign acquired firms exhibit higher short-run (post-acquisition) wages than their domestic counterparts. The observed wage disparities are most pronounced for low paying firms (with average wages below the median). Finally, we find systematic wage premia in Western European countries, but not so in Eastern Europe.

Suggested Citation

  • Oberhofer, Harald & Stöckl, Matthias & Winner, Hannes, 2012. "The Wage Premium of Globalization: Evidence from European Mergers and Acquisitions," Working Papers in Economics 2012-1, University of Salzburg.
  • Handle: RePEc:ris:sbgwpe:2012_001
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    References listed on IDEAS

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    Cited by:

    1. John P. Weche Geluebcke, 2012. "Foreign and Domestic Takeovers in Germany: First Comparative Evidence on the Post-acquisition Target Performance using new Data," Working Paper Series in Economics 249, University of Lüneburg, Institute of Economics.
    2. John P. Weche Gelübcke, 2013. "Foreign and Domestic Takeovers in Germany: Cherry-picking and Lemon-grabbing," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 59(4), pages 275-294.
    3. Liu, Qing & Lu, Ruosi & Zhang, Chao, 2015. "The labor market effect of foreign acquisitions: Evidence from Chinese manufacturing firms," China Economic Review, Elsevier, vol. 32(C), pages 110-120.

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    More about this item

    Keywords

    Globalization; mergers and acquisitions; wage effects; propensity score matching;
    All these keywords.

    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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