Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230082
Authors: 
Egger, Hartmut
Jahn, Elke
Kornitzky, Stefan
Year of Publication: 
2020
Citation: 
[Journal:] The World Economy [ISSN:] 1467-9701 [Volume:] 43 [Issue:] 2 [Pages:] 302-325
Abstract: 
This paper evaluates the effect of foreign takeover on wages of workers in German establishments, using rich linked employer–employee data from 2003 to 2014. To identify a causal effect of foreign takeover, we combine propensity‐score matching with a difference‐in‐difference estimator. We find that a takeover by a foreign investor leads to a wage premium of 4.0 log points in the year after ownership change, which further increases to 6.3 log points 3 years after acquisition. The wage premium is largest for high‐skilled workers, which is consistent with three theoretical arguments, namely rent appropriation by managers, technology protection and training on new technology. We also show that the wage premium does not pick up an exporter effect due to a platform investment of the foreign owner, that it takes about 4 years before it fully develops, that it does not vanish after foreign divestment and that the wage increase is specific to foreign acquisition instead of ownership change per se.
Subjects: 
difference‐in‐difference estimation
foreign ownership wage premium
impact versus adjustment effects
propensity‐score matching
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by-nc/4.0/
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.