The productivity and wage effects of foreign acquisition in the United Kingdom |
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| Authors: | Martin J Conyon Sourafel Girma Steve Thompson & Peter W Wright |
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| Institution: | The Wharton School, University of Pennsylvania, USA and Warwick Business School, University of Warwick, UK,;School of Economics, University of Nottingham, UK,;Department of Economics, University of Leicester, UK,;CEPR and School of Economics, University of Nottingham, UK |
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| Abstract: | This paper provides a systematic empirical analysis of the impact of foreign ownership on productivity and wages in the United Kingdom. Using a specially constructed database for the period 1989–1994, it uses ownership change (acquisition) to control for unobserved differences between plants. It finds that foreign firms pay equivalent employees 3.4% more than domestic firms, though this is wholly attributable to their higher levels of productivity. Firms which are acquired by foreign companies exhibit an increase in labour productivity of 13%. |
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