Is Labor Mobility a Channel for Spillovers from Multinationals? Evidence from Norwegian Manufacturing

Balsvik, Ragnhild

doi:10.1162/rest_a_00061

Cited by 218 publications

(191 citation statements)

References 35 publications

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“…We cannot identify these imperfections, but they must be truly large to sustain the abnormally high rents to the hiring firms implied by our results: $2.3 $4 return on each dollar invested in attracting SPs. On the other hand, we can support the first interpretation, based on uncertainty regarding workers' spillover potential, by applying the decomposition in (6) to the results in Balsvik (2011), whose data and method are comparable to ours, except for one difference, that the SPs in her study are the workers with foreign firm experience hired by domestic firms. Because this experience, unlike the productivity gap, is a highly visible characteristic, their spillover potential should be better recognized and rewarded.…”

Section: Gains Distributionsupporting

confidence: 65%

“…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%

“…Several recent empirical studies, including Gorg and Strobl (2005), Markusen and Trofimenko (2009), Balsvik (2011), Parrotta and Pozzoli (2012), and Stoyanov and Zubanov (2012), have documented the workings of this mechanism, linking firm productivity gains to hiring workers from technologically superior firms. 1 Since the latter receive no compensation from the firms that hire their workers, the existence of knowledge spillovers through worker mobility implies a positive externality.…”

Section: Introductionmentioning

confidence: 99%

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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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Section: Gains Distributionsupporting

confidence: 65%

Section: Output Gains Distribution Between Firms and Workersmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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

Stoyanov

Zubanov

2014

European Economic Review

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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%

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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“…5 Existing empirical work is consistent with the idea that workers learn from foreign managers, but suggests that spillovers to other firms and workers are small in developing countries. 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.…”

Section: Introductionmentioning

confidence: 96%

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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Is Labor Mobility a Channel for Spillovers from Multinationals? Evidence from Norwegian Manufacturing

Cited by 218 publications

References 35 publications

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

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

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

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

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