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The Wage Premium of Globalization: Evidence from European Mergers and Acquisitions

16 Pages Posted: 28 Jan 2012  

Harald Oberhofer

Vienna University of Economics and Business - Department of Economics; Austrian Institute of Economic Research (WIFO)

Matthias Stockl

affiliation not provided to SSRN

Hannes Winner

University of Salzburg - Department of Economics and Social Sciences; Austrian Institute of Economic Research (WIFO); University of Oxford - Oxford University Centre for Business Taxation; University of Innsbruck - Department of Economics & Statistics

Date Written: 2012

Abstract

We provide evidence on the impact of globalization on labor market outcomes analyzing pay differences between foreign-acquired and domestically-owned firms. For this purpose, we use firm level data from 16 European countries over the time period 1999-2006. Applying propensity score matching techniques we estimate positive wage premia of cross-boarder merger and acquisitions (M&As), suggesting that foreign acquired firms exhibit higher short-run (post-acquisition) wages than their domestic counterparts. The observed wage disparities are most pronounced for low paying firms (with average wages below the median). Finally, we find systematic wage premia in Western European countries, but not so in Eastern Europe.

Keywords: Globalization, mergers and acquisitions, wage effects, propensity score matching

JEL Classification: C21, F15, G34, J31

Suggested Citation

Oberhofer, Harald and Stockl, Matthias and Winner, Hannes, The Wage Premium of Globalization: Evidence from European Mergers and Acquisitions (2012). Economics Discussion Paper No. 2012-6. Available at SSRN: https://ssrn.com/abstract=1994247 or http://dx.doi.org/10.2139/ssrn.1994247

Harald Oberhofer (Contact Author)

Vienna University of Economics and Business - Department of Economics ( email )

Welthandelsplatz 1
A-1020 Vienna
Austria

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103
Austria

Matthias Stockl

affiliation not provided to SSRN

No Address Available

Hannes Winner

University of Salzburg - Department of Economics and Social Sciences ( email )

Residenzplatz9
Salzburg, 5010
Austria

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103
Austria

University of Oxford - Oxford University Centre for Business Taxation ( email )

Saïd Business School
Park End Street
Oxford, OX1 1HP
United Kingdom

University of Innsbruck - Department of Economics & Statistics ( email )

Universitatsstrasse 15
Innsbruck, A-6020
Austria

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