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Wage Gains from Foreign Ownership: Evidence from Linked Employer-Employee Data

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  • Köllő, János

    (Institute of Economics, Budapest)

  • Boza, István

    (Centre for Economic and Regional Studies)

  • Balázsi, László

    (Central European University, Budapest)

Abstract

We compare wages in multinational enterprises (MNEs) versus domestic firms, the earnings of domestic firm workers with past, future and no MNE experience, and estimate how the presence of ex-MNE peers affects the earnings of domestic firm employees. The analysis relies on monthly panel data covering half of the Hungarian population and their employers in 2003-2011. We identify the returns to MNE experience from changes of ownership, wages paid by new firms of different ownership, and the movement of workers between enterprises. We find high contemporaneous and lagged returns to MNE experience and significant spillover effects. Foreign acquisition has a moderate wage impact but there is a wide gap between new MNEs and domestic firms. The findings suggest that MNE experience is valued in the high-wage segment of the local economy, connected with the MNEs via worker turnover.

Suggested Citation

  • Köllő, János & Boza, István & Balázsi, László, 2020. "Wage Gains from Foreign Ownership: Evidence from Linked Employer-Employee Data," IZA Discussion Papers 13040, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13040
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    2. Boza István & Ilyés Virág, 2020. "Decomposition of co-worker wage gains," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-31, March.

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    More about this item

    Keywords

    Hungary; foreign direct investment; wage differentials; multinational enterprises; wage spillover;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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