Conyon, Martin J.; Girma, Sourafel; Thompson, Steve; Wright, Peter W. --- "Multinationals and Labour: Evidence from the International Acquisition of UK Firms" [2003] ELECD 81; in Waterson, Michael (ed), "Competition, Monopoly and Corporate Governance" (Edward Elgar Publishing, 2003)

Book Title: Competition, Monopoly and Corporate Governance

Editor(s): Waterson, Michael

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843760894

Section: Chapter 2

Section Title: Multinationals and Labour: Evidence from the International Acquisition of UK Firms

Author(s): Conyon, Martin J.; Girma, Sourafel; Thompson, Steve; Wright, Peter W.

Number of pages: 22

Extract:

2. Multinationals and labour: evidence
from the international acquisition of
UK firms
Martin J. Conyon, Sourafel Girma, Steve
Thompson and Peter W. Wright

1. INTRODUCTION

This chapter examines the effects of multinational enterprise (MNE) on
labour outcomes, using firm ownership change as an experiment to isolate
its impact. Specifically, our primary contribution is to evaluate both the
wage and productivity effects of domestic and foreign acquisitions within
a large panel of UK firms over the period 1989­94. Our intention is to
explore an issue that has become something of a battleground for compet-
ing hypotheses. This is whether multinational firms raise or lower employee
wages, and improve or impede firm performance levels, in the domestic
economy. The general debate has been considered by Caves (1996), Cowling
and Sugden (1987, 1998) inter alia. A second contribution that we make is
in methodology. The longitudinal nature of our data, which allows us to
track firms over time, including changes in their ownership, means that we
can provide superior econometric tests of the wage and productivity effects
of MNEs. In particular, the panel data allows us to purge the analysis of
many of the industry, technology and plant vintage effects that typically
plague comparative work on wages and productivity.
In taking this approach, it seems entirely appropriate that we are using
one of Keith Cowling's enduring professional interests, namely merger
activity,1 to explore another, namely the impact of international capital on
labour.2 Indeed Cowling and Sugden (1987) have advanced ...