Clougherty, Joseph and Gugler, Klaus and Sørgard, Lars and Szücs, Florian. 2014. Cross-border mergers and domestic-firm wages: Integrating "spillover effects" and "bargaining effects" Journal of International Business Studies JIBS 45 (4): S. 450-470.
BibTeX
Abstract
Two literatures exist concerning cross-border merger activity's impact on domestic wages: one focusing on positive spillover effects; the other focusing on negative bargaining effects. Motivated by scarce theoretical scholarship spanning these literatures, we nest both mechanisms in a single conceptual framework. Considering the separate phenomena of inward and outward cross-border merger activity, our theoretical model generates three formal propositions: cross-border mergers can lead to wage increases via positive spillover effects; and negative bargaining effects are relatively more dominant when union market power is high, and when merging firms exhibit relatedness. Employing US firm-level panel data on wages combined with industry-level data on unionization and merger activity (covering 1989-2001), we find support for our propositions as inward and outward cross-border merger activity generate positive spillovers to wages, but are more likely to generate firm-level wage decreases when unionization rates are high and when cross-border merger activity is characterized as horizontal. Accordingly, future research on how cross-border mergers affect domestic wages should be mindful that both spillover and bargaining effects are at play, and that the degree of union market power and the relatedness of cross-border merger activity are critical in determining which effect dominates.
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Status of publication | Published |
---|---|
Affiliation | WU |
Type of publication | Journal article |
Journal | Journal of International Business Studies JIBS |
Citation Index | SSCI |
WU Journalrating 2009 | A |
WU-Journal-Rating new | FIN-A, MAN-A+, STRAT-A, VW-A, WH-A |
Language | English |
Title | Cross-border mergers and domestic-firm wages: Integrating "spillover effects" and "bargaining effects" |
Volume | 45 |
Number | 4 |
Year | 2014 |
Page from | 450 |
Page to | 470 |
Reviewed? | Y |
DOI | http://dx.doi.org/10.1057/jibs.2014.2 |
Associations
- People
- Gugler, Klaus (Details)
- Szücs, Florian (Details)
- External
- Clougherty, Joseph (University of Illinois at Urbana-Champaign, United States/USA)
- Sørgard, Lars (Norwegian School of Economics, Norway)
- Organization
- Department of Economics DP (Details)
- Research Institute for Regulatory Economics FI (Details)
- Department of Economics (Gugler) (Details)
- Research areas (ÖSTAT Classification 'Statistik Austria')
- 5370 Industrial economics (Details)