From Local to Global: How Foreign Acquisitions Reshape Job Mobility

Carl Davidson, Fredrik Heyman, Steven Matusz, Fredrik Sjöholm and Susan Chun Zhu
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Carl Davidson: Michigan State University
Susan Chun Zhu: Michigan State University

No 1453, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper explores the impact of experience in foreign-owned firms on worker mobility, with a focus on Swedish companies acquired by foreign multinationals. We posit that international experience, by imparting knowledge about foreign operations, enhances an employee’s appeal to multinational enterprises (MNEs). By matching acquired firms with comparable control firms and using a stacked difference-in-differences estimation methodology, we observe a significant impact of foreign acquisitions on job mobility. Our results indicate that foreign acquisitions raise the likelihood of a job switch to an MNE by 3.6 percentage points, while concurrently decreasing the probability of a switch to a local firm by around 4 percentage points. Furthermore, the postacquisition wage growth rate is significantly higher for workers transitioning to MNEs compared to those remaining at the acquired firms, suggesting a steeper wage growth trajectory for employees moving to MNEs. Additional analyses reveal that the positive effect on mobility to MNEs is linked to learning opportunities stemming from increased trade linkages within multinational production networks and the implementation of advanced technologies after an acquisition.

Keywords: Multinational firms; Foreign acquisitions; Job mobility; International experience (search for similar items in EconPapers)
JEL-codes: F16 F66 J60 (search for similar items in EconPapers)
Pages: 78 pages
Date: 2022-12-22, Revised 2025-11-25
New Economics Papers: this item is included in nep-int and nep-lab
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