Fredrik Heyman, Fredrik Sjöholm and Patrik Gustavsson Tingvall “Acquisitions, Multinationals, and Wage Dispersion”. Canadian Journal of Economics, 44(2), 627-650.

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Abstract: Multinational firms pay relatively high wages. Less is known about the wage structure within multinational and non-multinational firms. We examine the impact of acquisitions on wage dispersion in Sweden using a large matched employer-employee data set including about 50 percent of the Swedish labor force and with detailed information on job-tasks and education. Foreign acquisitions of both domestic multinationals and local firms increase the wage dispersion by increasing wages for high-skilled employees. The positive impact is concentrated to CEOs and other managers, whereas other groups are either negatively affected or not affected at all. The impact on high-skilled workers’ wages seems to be caused by the acquisition rather than by the ownership itself, since changes from foreign to Swedish ownership result in similar increases. Our results are in line with theories stressing ownership changes as opportunities to renegotiate contracts and perform organizational changes.