Foreign Takeovers and Wages in Hungary

Csengödi, Sándor; Jungnickel, Rolf; Urban, Dieter M.
April 2008
Review of World Economics;2008, Vol. 144 Issue 1, p55
Academic Journal
This study investigates the wage premium that foreign takeover firms pay for a type of worker on top of the wage before takeover. We apply Hungarian employee-employer matched data from 1992 until 2001, and find a nonlinear wage premium profile before and after a foreign takeover. Takeover targets do not pursue a different wage policy before ownership change compared to other indigenous firms. Then, there is a hike in the wage premium during the takeover year. Moreover, there is gradually building up a wage premium over the following years after the takeover. The later stylized fact helps discriminating bargaining theories of the foreign-investor wage premium from technology spillover theories.


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