EIJS Working Papers Series
IS THERE REALLY A FOREIGN OWNERSHIP WAGE PREMIUM? EVIDENCE FROM MATCHED EMPLOYER-EMPLOYEE DATA
(), Fredrik Sjöholm
() and Patrik Gustavsson Tingvall
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; (follow links to similar papers)
JEL-Codes: C23; F23; J31; (follow links to similar papers)
36 pages, November 1, 2006
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- This paper is published as:
Heyman, Fredrik, Fredrik Sjöholm and Patrik Gustavsson Tingvall, (2007), 'IS THERE REALLY A FOREIGN OWNERSHIP WAGE PREMIUM? EVIDENCE FROM MATCHED EMPLOYER-EMPLOYEE DATA', Journal of International Economics, Vol. 73, No. 2, pages 355-376
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