Wage gains from foreign ownership: evidence from linked employer–employee data

Journal for Labour Market Research

Table 4 Wages before and after entry to new MNEs and new domestic firms

	Coeff.	t-test	Person-months
Workers of domestic start-ups, before their entry	0		115,443
Workers of foreign start-ups, before their entry	0.245***	8.3	146,585
Workers of domestic start-ups, after their entry	− 0.014	0.3	84,018
Workers of foreign start-ups, after their entry	0.391***	8.9	125,247
Double difference (point estimate, F-test)	0.146**	9.5

Significant at the **0.05, ***0.01 level. The t-values are based on standard errors adjusted for clustering by persons and firms
OLS regression with dummies standing for the four distinct groups. Dependent variable: log daily wage in the given month relative to the national mean. Sample: 471,489 person-months belonging to 8225 skilled workers hired by and staying until December 2011 in 519 newly established firms (366 domestic and 147 foreign-owned). We considered a firm newly established if its staff number jumped from less than 5 to more than 50, or, from less than 50 to more than 300 within a month. Workers employed by new firms before their ‘big bang’, workers leaving the new firms and firms changing owner after the big bang are excluded. Controls: person, job and firm characteristics and sector-year interactions. See Appendix 1: Table 12 for variable definitions