Gianluca Orefice, Nicholas Sly & Farid Toubal , 2015.
"The Multinational Wage Premium and Wage Dynamics,"
CEPII Working Paper 2015- 27 , December 2015 , CEPII.
Using detailed administrative data linking French firms and workers over the years 2002-2007, we document a distinct U-shaped pattern in worker-level wages surrounding the time their employer is acquired by a foreign firm, with a dip in earnings observed in years just before domestic firms switch to MNE status. The dip in earnings is evident in both wages and in-kind payments given to workers. To guide our empirical approach, we present a simple model with fair wage considerations among workers and endogenous cross-border acquisition activity that predicts this U-shaped pattern, and characterizes the selection of domestic targets for acquisition by an MNE.
multinational enterprises ; wage premium ; in-kind payments ; fair wages