The Impact of Foreign Acquisitions on Wage Dispersion [ Preliminary and incomplete

Empirical studies at a firmor sector-level suggest that Foreign Direct Investment (FDI) increase wage dispersion by positively impact high skill wages. We contribute to the literature by examining the issue of FDI and wages on a large matched Swedish employer-employee data-set. Results suggest that foreign owned multinational firms (MNCs) tend to pay relatively high-skill wages, especially in comparison with non-multinational Swedish-owned firms. Moreover, foreign acquisitions of Swedish firms tend to increase high-skill wages and decrease low-skill wages. That is, the positive impact on high-skill wages and increased wage dispersion seems to be caused by the acquisition itself rather than by the ownership. A breakdown of skill groups shows that the positive impact of acquisitions is largest for COEs and managers whereas other groups are either negatively affected by the change or not affected at all. JEL: F23, J31, C23