Resource title

Foreign Takeovers and Wages: Theory and Evidence from Hungary

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Resource description

This study discriminates FDI technology spillover from learning effects. Whenever learning takes time, our model predicts that foreign investors deduct the economic value of learning from wages of inexperienced workers and add it to experienced ones to prevent them from moving to local competitors. Hence, the national wage bill is unaffected by foreign takeovers. In contrast to learning, technology spillover effects occur whenever a worker with MNE experience contributes more to local firms' than to MNEs' productivity. In this case, experienced MNE workers are hired by local firms and the host country obtains a welfare gain. We investigate empirically wages, productivity, and worker turnover during the course of foreign takeovers on employee-employer matched data of Hungary and find evidence consistent with learning, but not with FDI technology spillovers.

Resource author

Sándor Csengődi, Rolf Jungnickel, Dieter M. Urban

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/19305

Resource license

Adapt according to the presented license agreement and reference the original author.