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

Sørgard, Lars, Klaus Gugler () and Joseph Clougherty
Authors registered in the RePEc Author Service: Florian Szücs and Lars Sørgard

No 9863, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: 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: Cross-border mergers; Fdi; Bargaining; Spillovers; Wages (search for similar items in EconPapers)
JEL-codes: F23 F66 J30 L21 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-cse, nep-int and nep-lab
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Citations: View citations in EconPapers (11)

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Journal Article: Cross-border mergers and domestic-firm wages: Integrating “spillover effects” and “bargaining effects” (2014)
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