Cross-Border M&A Activity and Wage Dynamics

Farid Toubal, Nicholas Sly and Gianluca Orefice

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Abstract: Using detailed administrative data that link French firms and workers over the years 2002 to 2007, the authors document declines in worker-level wages ahead of the time their employer is acquired by a foreign firm that are more than offset by gains in wages that emerge after cross-border acquisition. Specifically, relative wages fall by an estimated 7.5% in the years just before foreign acquisition, and they rise by approximately 12.5% in the years afterward. Changes in workers' earnings are evident in both wages and in-kind payments given to workers. Moreover, the authors provide theoretical foundations for the conditional mean independence assumption that underlies commonly applied empirical techniques.

Keywords: Cross-border M&A; merger and acquisition; wage dynamics; in-kind payments; fair wages; multinational firms (search for similar items in EconPapers)
Date: 2021
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Published in Industrial & Labor Relations Review, 2021, 74 (1), pp.131-162. ⟨10.1177/0019793919839031⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03355778

DOI: 10.1177/0019793919839031

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