Knowledge Transfers from Multinational to Domestic Firms: Evidence from Worker Mobility

Poole, Jennifer P.

doi:10.1162/rest_a_00258

Cited by 231 publications

(210 citation statements)

References 38 publications

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“…However, researchers (e.g., Aitken et al, 1996) found that positive wage spillovers were more likely in developed nations where firms have the requisite 'absorptive capacity' (Cantwell, 1993). And a number of recent studies have combined premise and employee level data in order to support the existence of positive spillovers to employee wages in transition nations (e.g., Smarzynska-Javorcik, 2004), developing nations (e.g., Görg & Strobl, 2005;Poole, 2013), and developed nations (e.g., Andrews et al, 2009;Balsvik, 2011).…”

Section: Background Literaturementioning

confidence: 99%

“…We draw from previous empirical work (e.g., Figlio & Blonigen, 2000;Conyon et al, 2002;Poole, 2013) that considers spillovers to be captured by the differential impact of cross-border activity with respect to domestic activity at the sector level in order to identify spillover effects. Accordingly, we first control for the sum of all merger activity -both domestic and cross-border -with respect to the number of employees in an industrial sector (hereafter, Total-Merger-Activity) to capture the general wage effects (due to demand and product competition changes as well as any other relevant labor market changes) involved with generic merger activity.…”

Section: Estimation Strategymentioning

confidence: 99%

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Cross-border mergers and domestic-firm wages: Integrating “spillover effects” and “bargaining effects”

et al. 2014

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Cross-border mergers and domestic-firm wages: Integrating "spillover effects" and "bargaining effects" Article (Draft) Original Citation: Clougherty, Joseph A. 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, 45. pp. 450-470. ISSN 0047-2506 This version is available at: http://epub.wu.ac.at/4129/ Available in ePub WU : April 2014 ePub WU , the institutional repository of the WU Vienna University of Economics and Business, is provided by the University Library and the IT-Services. The aim is to enable open access to the scholarly output of the WU.This document is an early version circulated as work in progress. There are minor differences between this and the publisher version which could however affect a citation.http://epub.wu.ac.at/ 1 Cross-border mergers and domestic-firm wages:Integrating 'spillover effects' and 'bargaining effects' 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 marketpower and the relatedness of cross-border merger activity are critical in determining which effect dominates.

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Section: Background Literaturementioning

confidence: 99%

Section: Estimation Strategymentioning

confidence: 99%

Cross-border mergers and domestic-firm wages: Integrating “spillover effects” and “bargaining effects”

et al. 2014

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“…Hiring SPs will increase output because they are more productive, but there may also be extra costs due to higher input prices, labor in particular. Indeed, the wages of both worker types are likely to be affected, as SPs may receive a premium reflecting the knowledge they bring (Balsvik, 2011), and non SPs may benefit by learning from SPs (Poole, 2013) or through wage bargaining actuated by fairness concerns (Smith, 2012). The profit after hiring SPs is…”

Section: Output Gains Distribution Between Firms and Workersmentioning

confidence: 99%

“…In particular, domestic firms pay a wage premium to new hires with foreign firm experience over the wages of otherwise similar workers without such experience (Pesola, 2011). Incumbent workers benefit as well, seeing their wages grow in step with the share of ex foreign firm employees in their firms (Poole, 2013). Hiring foreign specialists by domestic firms is also linked to wage increases in those firms, estimated at 4.5 6.2% depending on skill level (Markusen and Trofimenko, 2009).…”

Section: Introductionmentioning

confidence: 99%

The distribution of the gains from spillovers through worker mobility between workers and firms

Stoyanov

Zubanov

2014

European Economic Review

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a b s t r a c tKnowledge spillovers through worker mobility between firms, found in previous research, imply that knowledge production within firms creates a positive externality to the hiring firms and their workers. We calculate the shares in the gains from spillovers retained by these parties using matched employer employee data from Danish manufacturing. We find that around two thirds of the total output gain (0.1% per year) is netted by the firms as extra profit, about a quarter goes to the incumbent workers as extra wages, while the workers who bring spillovers receive no more than 8% of it. This gains distribution, which favors the hiring firms, is similar for different types of moving workers, and is stable over time.

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“…Balsvik (2011) finds that in Norway workers with experience working for a MNE contribute 20% more to plant productivity than comparable workers without MNE experience. Poole (2012) finds that Brazilian firms which employ a higher share of workers with previous experience at MNEs pay higher wages, even after controlling for worker, firm and time fixed effects. However, the effect is small.…”

Section: Introductionmentioning

confidence: 89%

Brain drain or brain gain? Technology diffusion and learning on-the-job

Sampson

2013

Journal of International Economics

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This paper develops a theory of technology transfer when technology is embodied in human capital and learning requires on-the-job communication between managers and workers. Patterns of knowledge diffusion depend on where high knowledge managers work and how much time they allocate to training workers. Managers appropriate the surplus training creates and in the open economy managers face a cross-country trade-off between labor costs and the value of knowledge transfer. Complementarity between country-wide efficiency and managerial knowledge makes learning more valuable in the North meaning that high knowledge managers choose to work in the North and globalization precipitates a brain drain of high knowledge Southern agents to the North. The brain drain reduces learning opportunities in the South and exacerbates cross-country knowledge differences.

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Knowledge Transfers from Multinational to Domestic Firms: Evidence from Worker Mobility

Cited by 231 publications

References 38 publications

Cross-border mergers and domestic-firm wages: Integrating “spillover effects” and “bargaining effects”

Cross-border mergers and domestic-firm wages: Integrating “spillover effects” and “bargaining effects”

The distribution of the gains from spillovers through worker mobility between workers and firms

Brain drain or brain gain? Technology diffusion and learning on-the-job

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