Importing Automation and Wage Inequality through Foreign Acquisitions

Malin Gardberg, Fredrik Heyman, Joacim Tåg

Research output: Book/ReportCommissioned report


Is technology or trade driving increases in wage inequality? We propose that technology interacts with trade in the form of foreign direct investments to widen domestic wage inequality. We show that foreign acquisitions of domestic firms disproportionately affect wages for workers who perform tasks sensitive to the technology specialization (software or robotics) of the acquiring firm. Based on Swedish matched employer-employee data covering two decades and staggered difference-in-differences methods we find wages to decline by up to 5.2% annually over an eight-year post period. Our results suggest that a trade policy aimed at attracting foreign companies with high technological capabilities can help countries advance technologically, but this may come at the cost of increased domestic wage inequality.
Original languageEnglish
Place of PublicationStockholm
PublisherIFN - Research Institute of Industrial Economics
Number of pages50
Publication statusPublished - 2023
MoE publication typeD4 Published development or research report or study

Publication series

NameIFN Working Paper


  • 511 Economics
  • Foreign Direct Investments
  • Automation
  • Inequality
  • AI
  • Robots
  • Technology
  • Trade
  • Mergers and Acquisitions
  • Multinational firms
  • Wages


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