Evaluating the Foreign Ownership Wage Premium Using a Difference-Indifferences Matching Approach

30 Pages Posted: 23 Aug 2006

See all articles by Sourafel Girma

Sourafel Girma

Nottingham University Business School

Holger Görg

University of Kiel; Kiel Institute for the World Economy

Date Written: June 2006

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: multinationals, acquisitions, wages, difference-in-differences, matching estimator

JEL Classification: F23, J31

Suggested Citation

Girma, Sourafel and Gorg, Holger, Evaluating the Foreign Ownership Wage Premium Using a Difference-Indifferences Matching Approach (June 2006). IIIS Discussion Paper No. 165. Available at SSRN: https://ssrn.com/abstract=925809 or http://dx.doi.org/10.2139/ssrn.925809

Sourafel Girma (Contact Author)

Nottingham University Business School ( email )

Jubilee Campus
Nottingham, NG8 1BB
United Kingdom
+44 0 115 8466656 (Phone)

HOME PAGE: http://www.nottingham.ac.uk/~lizsmg/

Holger Gorg

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

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