Cross-border mergers and domestic-firm wages: Integrating ‘spillover effects’ and ‘bargaining effects’
Joseph Clougherty (),
Klaus Gugler (),
Lars Sørgard () and
Florian Szücs ()
No 9863, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Two literatures exist concerning cross-border merger activity’s impact on domestic wages: one focusing on spillover-effects; the other focusing on 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, we predict that ‘bargaining’ (‘spillover’) effects are relatively more dominant under high (low) unionization rates and under high (low) degrees of 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 best characterized as related.
Keywords: bargaining; Cross-Border Mergers; FDI; spillovers; wages (search for similar items in EconPapers)
JEL-codes: F23 F66 J30 L21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-int and nep-lab
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Journal Article: Cross-border mergers and domestic-firm wages: Integrating “spillover effects” and “bargaining effects” (2014)
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