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Is there Really a Foreign Ownership Wage Premium? : Evidence from Matched Employer-Employee Data

Heyman, Fredrik LU ; Sjöholm, Fredrik LU and Tingvall, Patrik Gustavsson (2007) In Journal of International Economics 73(2). p.355-376
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... (More)
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. (Less)
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author
publishing date
type
Contribution to journal
publication status
published
subject
keywords
FDI, foreign ownership, wages, matched employer–employee data, propensity score matching, F23, J31, C23
in
Journal of International Economics
volume
73
issue
2
pages
22 pages
publisher
Elsevier
external identifiers
  • scopus:35648955589
ISSN
1873-0353
DOI
10.1016/j.jinteco.2007.04.003
language
English
LU publication?
no
id
1149fb27-0c2c-4421-a11b-83413e714fa2
date added to LUP
2017-10-10 11:45:24
date last changed
2017-11-12 04:35:47
@article{1149fb27-0c2c-4421-a11b-83413e714fa2,
  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.},
  author       = {Heyman, Fredrik and Sjöholm, Fredrik and Tingvall, Patrik Gustavsson},
  issn         = {1873-0353},
  keyword      = {FDI,foreign ownership,wages,matched employer–employee data,propensity score matching,F23,J31,C23},
  language     = {eng},
  number       = {2},
  pages        = {355--376},
  publisher    = {Elsevier},
  series       = {Journal of International Economics},
  title        = {Is there Really a Foreign Ownership Wage Premium? : Evidence from Matched Employer-Employee Data},
  url          = {http://dx.doi.org/10.1016/j.jinteco.2007.04.003},
  volume       = {73},
  year         = {2007},
}