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The productivity and wage effects of foreign acquisition in the United Kingdom
Author(s) -
Conyon Martin J.,
Girma Sourafel,
Thompson Steve,
Wright Peter W.
Publication year - 2002
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/1467-6451.00169
Subject(s) - productivity , foreign ownership , wage , labour economics , control (management) , business , kingdom , demographic economics , economics , foreign direct investment , macroeconomics , management , paleontology , biology
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%.