Do firms or workers drive the foreign acquisition wage premium?

Marcus Rösch, Michiel Gerritse, Bas Karreman, Frank Oort and Bart Loog
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Marcus Rösch: Erasmus University Rotterdam
Bas Karreman: Erasmus University Rotterdam
Bart Loog: Statistics Netherlands

No 22-014/V, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We decompose the wage premium after foreign acquisitions of Dutch domestic firms into the con- stituent firm- and worker-level premia. Firm-level premia grow up to 3.5%, accounting for the major- ity of the acquisition premium. Worker-level premia by contrast, grow up to 1% and only materialize with delay, as the acquired firms hire workers with higher earnings capacity than domestic firms. Within firms, premia are also higher for workers with a relatively high earnings capacity. Though in- dustry variation and firm size class heterogeneity is considerable, the dominance of firm-level premia suggests that foreign acquisitions change firms beyond a workforce reshuffling.

Keywords: multinational firms; foreign acquisition; wage components; labor mobility; matched employer-employee data; AKM (search for similar items in EconPapers)
JEL-codes: F23 G34 J31 (search for similar items in EconPapers)
Date: 2022-02-14
New Economics Papers: this item is included in nep-bec, nep-cwa, nep-hrm, nep-int and nep-lma
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