Highlights :

• Document a distinct U-shaped pattern in worker-level wages surrounding the time their employer is acquired by a foreign firm.
• Use detailed administrative data linking French firms and workers over the years 2002-2007.
• Present a model of 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.
• Show that the dip in earnings is evident in both wages and in-kind payments given to workers.
• Our findings stands in contrast to prior work suggesting MNEs have no significant relationship with wages paid to employees.

 Abstract :
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.

 Keywords : multinational enterprises | wage premium | in-kind payments | fair wages

 JEL : F66, F14, F23