Acquisitions, Multinationals, and Wage Dispersion
29 Pages Posted: 28 Jun 2007 Last revised: 27 Nov 2007
Date Written: November 21, 2006
Abstract
Multinational firms pay relatively high wages. Less is known about the wage structure within multinational and non-multinational firms. We examine the impact of acquisitions on wage dispersion in Sweden using a large matched employer-employee data set including about 50 percent of the Swedish labor force and with detailed information on job-tasks and education. Foreign acquisitions of both domestic multinationals and local firms increase the wage dispersion by increasing wages for high-skilled employees. The positive impact is concentrated to CEOs and other managers, whereas other groups are either negatively affected or not affected at all. The impact on high-skilled workers' wages seems to be caused by the acquisition rather than by the ownership itself, since changes from foreign to Swedish ownership result in similar increases. Our results are in line with theories stressing ownership changes as opportunities to renegotiate contracts and perform organizational changes.
Keywords: FDI, Multinational Companies, Foreign Ownership, Wage Dispersion, Skill groups, Matched Employer-Employee data
JEL Classification: F23, J31, C23
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela and the United States
By Brian Aitken, Ann E. Harrison, ...
-
Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?
By Jonathan Haskel, Sonia C. Pereira, ...
-
Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?
By Jonathan Haskel, Sonia C. Pereira, ...
-
Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?
By Jonathan Haskel, Sonia C. Pereira, ...
-
Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?
By Holger Görg and David Greenaway
-
Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Investment?
By Holger Görg and David Greenaway
-
Foreign Direct Investment as a Catalyst for Industrial Development
-
Foreign Investment and Productivity Growth in Czech Enterprises
By Bernard Hoekman and Simeon Djankov
-
Technology Transfer and Spillovers? Does Local Participation with Multinationals Matter?
By Magnus Blomstrom and Fredrik Sjoholm