Is There Really a Foreign Ownership Wage Premium? Evidence from Matched Employer-Employee Data

36 Pages Posted: 16 Jan 2011

See all articles by Fredrik Heyman

Fredrik Heyman

Research Institute of Industrial Economics (IFN)

Fredrik Sjöholm

Lund University School of Economics and Management; Research Institute of Industrial Economics (IFN)

Patrik Gustavsson Tingvall

Stockholm School of Economics

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Date Written: March 27, 2007

Abstract

Numerous studies on firm-level data have reported higher average wages in foreign-owned firms than in domestically-owned firms. This, however, does not necessarily imply that the individual worker’s wage increase with foreign ownership. Using detailed matched employer-employee data on the entire Swedish private sector, we examine the effect of foreign ownership on individual wages, controlling for individual and firm heterogeneity as well as for possible selection bias in foreign acquisitions. We distinguish between foreign greenfields and takeovers and compare foreign owned firms with both domestic multinationals and local firms. Our results show a considerably smaller wage premium in foreign owned firms than what has been found in studies conducted at a more aggregate level. Moreover, foreign takeovers of Swedish firms tend to have no or even a negative effect on wages.

Suggested Citation

Heyman, Fredrik and Sjöholm, Fredrik and Gustavsson Tingvall, Patrik, Is There Really a Foreign Ownership Wage Premium? Evidence from Matched Employer-Employee Data (March 27, 2007). IFN Working Paper No. 674, Journal of International Economics, Vol. 73, No. 2, 2007, Available at SSRN: https://ssrn.com/abstract=1740402

Fredrik Heyman (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://https://www.ifn.se/eng/people/research-faculty/fredrikh_1

Fredrik Sjöholm

Lund University School of Economics and Management ( email )

P.O Box 7080
Lund
Sweden

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Patrik Gustavsson Tingvall

Stockholm School of Economics ( email )

P.O. Box 6501
Stockholm
Sweden

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