Scandinavian Working Papers in Economics

EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

No 222: Acquisitions, Multinationals, and Wage Dispersion

Fredrik Heyman , Fredrik Sjöholm () and Patrik Gustavsson Tingvall ()
Additional contact information
Fredrik Heyman: European Institute of Japanese Studies, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden
Fredrik Sjöholm: European Institute of Japanese Studies, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden
Patrik Gustavsson Tingvall: European Institute of Japanese Studies, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: Multinational firms pay relatively high wages. Less is known about the wage structure within multinational and non-multinational firms. We examine the impact of acquisitions on wage dispersion in Sweden using a large matched employer-employee data set. Foreign acquisitions of Swedish firms increase wage dispersion by increasing wages for high-skilled workers. The positive impact is concentrated to CEOs and managers, whereas other groups are either negatively affected or not affected at all. The impact on high-skilled workers’ wages seems to be caused by the acquisition rather than the ownership itself, since ownership changes from foreign to Swedish result in similar increases.

Keywords: FDI; Multinational Companies; Foreign ownership; Wage-Dispersion; Skill groups; Matched Employer-Employee data

JEL-codes: C23; F23; J31

28 pages, January 10, 2006

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