Foreign ownership and transferring of gender norms

Abstract

Abstract In this paper, we study foreign ownership as a vehicle for transferring gender norms across international borders. Using detailed matched employer‐employee data from Sweden, we analyze how the within‐firm gender pay gap is affected by the degree of gender inequality in the home country of foreign investors. The results suggest that home‐country gender norms matter: The pay gap between men and women in foreign‐owned subsidiaries tends to decrease with the degree of gender equality in the investors' home market. Specifically, we find that acquisitions from countries with higher levels of gender equality tend to reduce the gender pay gap, whereas acquisitions from countries with lower levels of gender equality have no significant impact. We identify the effect from within‐match variation in incomes and rely on a dynamic difference‐in‐differences model and a high‐dimensional fixed effects model.