EconPapers    
Economics at your fingertips  
 

Cross-border mergers and domestic-firm wages: Integrating “spillover effects” and “bargaining effects”

Joseph Clougherty, Klaus Gugler (), Lars Sørgard and Florian W Szücs
Additional contact information
Florian W Szücs: DIW, Berlin, Germany

Journal of International Business Studies, 2014, vol. 45, issue 4, 450-470

Abstract: Two literatures exist concerning cross-border merger activity’s impact on domestic wages: one focusing on positive spillover effects; the other focusing on negative bargaining effects. Motivated by scarce theoretical scholarship spanning these literatures, we nest both mechanisms in a single conceptual framework. Considering the separate phenomena of inward and outward cross-border merger activity, our theoretical model generates three formal propositions: cross-border mergers can lead to wage increases via positive spillover effects; and negative bargaining effects are relatively more dominant when union market power is high, and when merging firms exhibit relatedness. Employing US firm-level panel data on wages combined with industry-level data on unionization and merger activity (covering 1989–2001), we find support for our propositions as inward and outward cross-border merger activity generate positive spillovers to wages, but are more likely to generate firm-level wage decreases when unionization rates are high and when cross-border merger activity is characterized as horizontal. Accordingly, future research on how cross-border mergers affect domestic wages should be mindful that both spillover and bargaining effects are at play, and that the degree of union market power and the relatedness of cross-border merger activity are critical in determining which effect dominates.

Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.palgrave-journals.com/jibs/journal/v45/n4/pdf/jibs20142a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/jibs/journal/v45/n4/full/jibs20142a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Cross-border mergers and domestic-firm wages: Integrating ?spillover effects? and ?bargaining effects? (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:jintbs:v:45:y:2014:i:4:p:450-470

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2

Access Statistics for this article

Journal of International Business Studies is currently edited by John Cantwell

More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-22
Handle: RePEc:pal:jintbs:v:45:y:2014:i:4:p:450-470