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Foregin Acquisition and Employment Effects in Swedish Manufacturing

Roger Bandick () and Patrik Karpaty ()

No 2007:10, Working Papers from Örebro University, School of Business

Abstract: This paper investigates the employment effects of foreign acquisitions in acquired firms in Swedish manufacturing during the 1990s, a period characterized by a dramatic increase in foreign ownership. To handle likely endogeneity problems, we evaluate the effects of foreign acquisitions on the targeted firms’ employment by combining propensity score matching with difference-in-difference estimation. We find some evidence of positive employment effects in firms taken over by foreigners and it seems that the employment of skilled labor increases more than the employment of less-skilled labor. Moreover, we examine whether the employment impact of foreign ownership differs between takeovers of Swedish MNEs and non-MNEs. Our results indicate that the positive employment effects only appear in acquired non-MNEs. Furthermore, we observe shifts in skill intensities toward higher shares of skilled labor in non-MNEs taken over by foreign MNEs but not in acquired Swedish MNEs

Keywords: Foregin acquisitions; labor demand; matching; difference-in difference; multinational enterprices (search for similar items in EconPapers)
JEL-codes: F16 F23 J23 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2007-11-15
New Economics Papers: this item is included in nep-lab
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