The Multinational Wage Premium and Wage Dynamics

Gianluca Orefice, Nicholas Sly and Farid Toubal

No 5263, CESifo Working Paper Series from CESifo

Abstract: Using detailed administrative data linking French firms and workers over the years 2002-2007, we document a distinct U-shaped pattern in worker-level wages surrounding the time their employer is acquired by a foreign firm, with a dip in earnings observed for several years before domestic firms switch to MNE status. This pre-acquisition decline in earnings can partly explain why prior evidence found no impact of foreign ownership on worker-level wages. Accounting for the pre-acquisition earnings dip and other confounding wage dynamics we find that MNEs increase remuneration to workers by 4.8% initially, and by 6%-8% after several years. Unique information about in-kind payments reveals that bonuses and other non-monetary remuneration also exhibit a U-shaped pattern surrounding foreign acquisition.

Keywords: multinational enterprises; wage premium; in-kind payments (search for similar items in EconPapers)
JEL-codes: F14 F23 F66 (search for similar items in EconPapers)
Date: 2015
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Related works:
Working Paper: The Multinational Wage Premium and Wage Dynamics (2016)
Working Paper: The Multinational Wage Premium and Wage Dynamics (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_5263

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