
- Document a distinct U-shaped pattern in worker-level wages surrounding the time their employer is acquired by a foreign firm.
- Use detailed administrative data linking French firms and workers over the years 2002-2007.
- Present a model of fair wage considerations among workers and endogenous cross-border acquisition activity that predicts this U-shaped pattern, and characterizes the selection of domestic targets for acquisition by an MNE.
- Show that the dip in earnings is evident in both wages and in-kind payments given to workers.
- Our findings stands in contrast to prior work suggesting MNEs have no significant relationship with wages paid to employees.

Using detailed administrative data linking French firms and workers over the years 2002-2007, we document a distinct U-shaped pattern in worker-level wages surrounding the time their employer is acquired by a foreign firm, with a dip in earnings observed in years just before domestic firms switch to MNE status. The dip in earnings is evident in both wages and in-kind payments given to workers. To guide our empirical approach, we present a simple model with fair wage considerations among workers and endogenous cross-border acquisition activity that predicts this U-shaped pattern, and characterizes the selection of domestic targets for acquisition by an MNE.


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