Can mergers lead to lower wages?

  • Gugler, K. (Contributor)
  • Joe Clougherty (Contributor)

Activity: Talk or presentationScience to science


The predictions from our theoretical model are that following a merger (i) spillovers as such will typically lead to higher wages and (ii) the trade union's response is to set lower wages if the merger is international and not change (or increase) wages if the merger is domestic.
We use data for 2‐digit industries in the US 1986‐2001 to test our predictions. When we control for the spillover effect, we find that international mergers have a significant and negative effect on wages and that domestic mergers have an insignificant (but positive)
effect on wages. International mergers are more likely to have an overall negative impact on domestic wages a) the more unionized the industry and b) if there is an outward rather than an inward international merger.
Period2 Sep 20104 Sep 2010
Event titleEARIE 2010
Event typeUnkonwn
Degree of RecognitionInternational

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502013 Industrial economics