We analyze whether regional labor markets are affected by exposure to import competition from China. We find negative employment effects for low-skilled workers, and observe that low-skilled workers tend to be pushed into unemployment or leave the labor force altogether. We find no evidence of wage effects. We partly expect this
We compare the performance in employment, wages and productivity for domestic plants acquired by new domestic and foreign owners. Prospective foreign owners pick large, highwage, high-productivity plants, while new domestic owners choose average performers of above-average size. Employment, labour productivity, and total factor productivity decline in domestic acquisition targets before acquisitions; only wages recover afterwards. Employment, wages and labour productivity increase after foreign acquisitions. The sample selection introduced by long-term comparisons and a focus on unique events introduces a downward bias into the results for domestic acquisitions and an upward bias for the foreign acquisitions.
Foreign direct investment is often considered an important source of knowledge spillovers. However, results from the empirical literature relating overall foreign presence to host country productivity are ambiguous. We argue that this may be because different modes of entry may have different effects on productivity. Using 24 years of comprehensive panel data for Norwegian Manufacturing, we find that greenfield entry has a negative impact on the productivity growth of domestic plants, while entry via acquisition affects local productivity positively. The net effect is a small positive effect of an overall change in foreign presence on local productivity growth.
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