Foreign Ownership and Skillbiased Technological Change
Michael Koch and
No 7332, CESifo Working Paper Series from CESifo
We conduct an empirical investigation into the effects of foreign ownership on worker skills using firm-level data from Spain. To control for endogeneity bias due to selection into foreign ownership, we combine a difference-in-differences approach with a propensity score weighting estimator. Our results provide novel evidence that foreign-acquired firms actively raise the skills of their workforce in response to the acquisition by hiring high-skilled workers and providing worker training. To pin down the mechanism, we exploit unique information on whether firms use their foreign parent in exporting to foreign markets. Our results suggest a fundamental role for market access through the foreign parent in explaining skill upgrading in foreign-acquired firms. We reveal substantial productivity gains within foreign-acquired firms and we show that these gains derive from a concurrent effort to raise worker skills and adopt more advanced technology, suggesting a skill bias in technological innovations. We develop a simple theoretical model of foreign ownership featuring technology-skill complementarities in production that can rationalize our findings.
Keywords: multinational enterprises; mergers and acquisitions; skill-biased technological; change; worker training; productivity (search for similar items in EconPapers)
JEL-codes: D22 D24 F23 G34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ino and nep-int
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Journal Article: Foreign ownership and skill-biased technological change (2019)
Working Paper: Foreign Ownership and Skill-biased Technological Change (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7332
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