Foreign Acquisitions, Domestic Multinationals, and R&D

Acquisitions, Multinationals and Wage Dispersion

Multinational firms pay relatively high wages. Less is known about the wage structure within multinational and non-multinational firms. We examine the impact of acquisitions on wage dispersion in Sweden using a large matched employer-employee data set. Foreign acquisitions of Swedish firms increase wage dispersion by increasing wages for high-skilled workers. The positive impact is concentrated...

Strategic Foreign Investments of South Korean Multinationals

Using unpublished data on foreign affiliates of South Korea for 2000-2004, we examine two possible motivations of foreign direct investment (FDI): factor proportion (vertical-FDI) or market access (horizontal-FDI). First of all, we find clear evidence of vertical FDI, which is considered an important part of the overall picture of South Korean FDI. Affiliate sales destined for exporting to the ...

Foreign Income and Domestic Deductions

Do Exporters Have Anything to Learn from Foreign Multinationals?

Using recent data on propensity-score matched firms from the U.K manufacturing industry, the paper uncovers evidence that acquisition FDI is an important channel of direct technology transfer from foreign multinationals to domestic exporters. This is consistent with the recently developed theory by Helpman, Melitz and Yeaple (2002) which, because of sunk costs, predicts firms engaged in FDI act...

Horizontal versus Vertical Foreign Direct Investment: Evidence from U.S. Multinationals

We use firm-level data from the Bureau of Economic Analysis to document a new set of facts on the motives for foreign direct investment. We document that a key difference between ‘’horizontal” and ‘’vertical” affiliates is their size: Intra-firm trade is concentrated among a small number of large affiliates, while the median affiliate, smaller in size, reports no shipments to the parent and dir...