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Author:Toubal, Farid 

Working Paper
The Multinational Wage Premium and Wage Dynamics
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. {{p}} To guide our empirical approach, we present a model with fair wage considerations among workers and endogenous cross-border acquisition activity among heterogeneous firms that predicts this U-shaped pattern, and characterizes the selection of domestic targets for acquisition by an MNE. Moreover, we use the model to theoretically ground the conditional mean independence assumption that underlies commonly applied empirical techniques. Worker-level wages decline by approximately 7.5 percent in the years leading up to foreign acquisition, and subsequently increase by 12.5 percent following cross-border acquisition.
AUTHORS: Sly, Nicholas; Orefice, Gianluca; Toubal, Farid
DATE: 2016-11-01

Working Paper
The few leading the many: foreign affiliates and business cycle comovement
This paper uses microdata on balance sheets, trade, and the nationality of ownership of firms in France to investigate the effect of foreign multinationals on business cycle comovement. We first show that foreign affiliates, which represent a tiny fraction of all firms, are responsible for a high share of employment, value added, and trade both at the national and at the regional levels. We also show that the distribution of foreign affiliates across regions differs with the nationality of the parent. We then show that foreign affiliates increase the comovement of activities between their region of location and their country of ownership. Moreover, we find greater comovement among French regions that have a more similar composition in terms of the nationality of foreign affiliates. These findings suggest that a non-negligible part of business cycle comovement is driven by a few multinational companies, and that the international transmission of shocks is partly due to linkages between affiliates and their foreign parents.
AUTHORS: Toubal, Farid; Kleinert, Jörn; Martin, Julien
DATE: 2012


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