How International Experience Helps Shape Labor Market Outcomes

This paper explores the influence of experience in foreign-owned firms on worker mobility, with a focus on Swedish companies acquired by foreign multinationals. We posit that international experience, by imparting knowledge about foreign operations, enhances an employee’s appeal to multinational enterprises (MNEs). By matching acquired firms with comparable control firms and utilizing a stacked difference-in-differences estimation methodology, we observe a significant impact of foreign acquisitions on job mobility. Our results indicate that foreign acquisitions raise the likelihood of a job switch to an MNE by approximately 4 percentage points, while concurrently decreasing the probability of a switch to a local firm by around 5 percentage points. Additional analyses reveal that the positive effect on mobility to MNEs is driven by learning opportunities stemming from increased trade linkages within multinational production networks and the implementation of advanced technologies subsequent to an acquisition. Furthermore, the post-acquisition wage growth rate is found to be significantly higher for workers transitioning to MNEs compared to those remaining at the acquired firms, suggesting a steeper wage growth trajectory for employees moving to MNEs.