Working Paper: CEPR ID: DP5788
Authors: Sourafel Girma; Holger Grg
Abstract: This paper seeks to identify the causal effect of foreign acquisitions on wages of skilled and unskilled workers, using difference-in-differences propensity score matching estimators. Our results suggest that there is substantial heterogeneity in the post-acquisition wage effect depending on the nationality of the foreign acquirer and the skill group of workers. We find sizable post acquisition wage effects on skilled and unskilled wages following an acquisition by a US firm. No such impacts result from acquisitions by EU multinationals. Also we discern some positive wage effects for unskilled workers resulting from acquisitions by multinationals from the rest of the world.
Keywords: Acquisitions; Difference-in-Differences; Matching Estimator; Multinationals; Wages
JEL Codes: F23; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Foreign acquisitions (F23) | Wages (skilled workers) (J31) |
| Foreign acquisitions (F23) | Wages (unskilled workers) (J31) |
| Foreign acquisitions by US firms (F23) | Wages (skilled workers) (J31) |
| Foreign acquisitions by US firms (F23) | Wages (unskilled workers) (J31) |
| Foreign acquisitions by EU firms (F23) | Wages (skilled workers) (J31) |
| Foreign acquisitions by EU firms (F23) | Wages (unskilled workers) (J31) |
| Foreign acquisitions (F23) | Income inequality (D31) |