The productivity and wage effects of foreign acquisition in the United Kingdom

Martin Conyon, Sourafel Girma, Steve Thompson and Peter Wright

Journal of Industrial Economics, 2002, vol. 50, issue 1, 85-102

Abstract: This paper provides a systematic empirical analysis of the impact of foreign ownership on productivity and wages in the United Kingdom. Using a specially constructed database for the period 1989–1994, it uses ownership change (acquisition) to control for unobserved differences between plants. It finds that foreign firms pay equivalent employees 3.4% more than domestic firms, though this is wholly attributable to their higher levels of productivity. Firms which are acquired by foreign companies exhibit an increase in labour productivity of 13%.

Date: 2002
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