Is There Really a Foreign Ownership Wage Premium? Evidence from Matched Employer-Employee Data

Fredrik Heyman, Patrik Tingvall and Fredrik Sjöholm

No 674, Working Paper Series from Research Institute of Industrial Economics

Abstract: Numerous studies on firm-level data have reported higher average wages in foreign-owned firms than in domestically-owned firms. This, however, does not necessarily imply that the individual worker’s wage increase with foreign ownership. Using detailed matched employer-employee data on the entire Swedish private sector, we examine the effect of foreign ownership on individual wages, controlling for individual and firm heterogeneity as well as for possible selection bias in foreign acquisitions. We distinguish between foreign greenfields and takeovers and compare foreign owned firms with both domestic multinationals and local firms. Our results show a considerably smaller wage premium in foreign owned firms than what has been found in studies conducted at a more aggregate level. Moreover, foreign takeovers of Swedish firms tend to have no or even a negative effect on wages.

Keywords: FDI; Foreign Ownership; Wages; Matched Employer-Employee Data; Propensity Score Matching (search for similar items in EconPapers)
JEL-codes: C23 F23 J31 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2006-11-14
New Economics Papers: this item is included in nep-lab and nep-ltv
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Published in Journal of International Economics, 2007, pages 355-376.

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Related works:
Journal Article: Is there really a foreign ownership wage premium? Evidence from matched employer-employee data (2007)
Working Paper: IS THERE REALLY A FOREIGN OWNERSHIP WAGE PREMIUM? EVIDENCE FROM MATCHED EMPLOYER-EMPLOYEE DATA (2006)
Working Paper: IS THERE REALLY A FOREIGN OWNERSHIP WAGE PREMIUM?EVIDENCE FROM MATCHED EMPLOYER-EMPLOYEE DATA (2004)
Working Paper: Is there Really a Foreign Ownership Wage Premium? Evidence from Matched Employer-Employee Data (2004)
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