Reassessing the Foreign Ownership Wage Premium in Germany

Hartmut Egger (), Elke Jahn and Stefan Kornitzky

No 189, Working Papers from Bavarian Graduate Program in Economics (BGPE)

Abstract: Thispaperevaluatesthee?ectofforeigntakeoveronwagesofworkersinGerman establishments, using rich linked employer-employee data from 2003 to 2014. To identify a causal e?ect of foreign takeover, we combine propensityscore matching with a di?erence-in-di?erence estimator. We ?nd that a takeoverbyaforeigninvestorleadstoawagepremiumof4.0logpointsinthe year after ownership change, which further increases to 6.3 log points three years after acquisition. The wage premium is largest for high-skilled workers and higher for managers than for non-managers. We also show that the wage premium does not pick up an exporter e?ect due to a platform investment of the foreign owner, that it takes four to ?ve years before it fully develops, and that the wage increase is speci?c to foreign acquisition instead of ownership change per se.

Keywords: Foreign ownership wage premium; Impact vs. adjustment e?ects; Propensity-score matching; Di?erence-in-di?erence estimation (search for similar items in EconPapers)
JEL-codes: F14 F16 F23 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2020-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Journal Article: Reassessing the foreign ownership wage premium in Germany (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bav:wpaper:189_eggerjahnkornitzky

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