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The Impact of Exporting and Export Destination on Manufacturing Wages: Evidence for Sub-Saharan Africa

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  • Chris Milner
  • Verena Tandrayen

Abstract

This paper investigates wage effects of trade status of African firms. Using data for manufacturing firms, we find a positive overall association between individual earnings and export status. Moreover, the skill wage premium in exporting firms is significantly higher. These results are consistent with either trade inducing higher wages in the exporting country, or with more productive (higher wage) firms self-selecting into exporting. The results are not robust, however, to disaggregation by export destination. Exporting to outside Africa generates a negative wage premium whereas exporting to African markets yields a positive premium in export firms of the exporting country. This suggests that there is a disciplining effect on the wages of exporting firms only when exporting is to more competitive markets. Copyright � 2006 The Authors; Journal compilation � 2007 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 11 (2007)
Issue (Month): 1 (02)
Pages: 13-30

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Handle: RePEc:bla:rdevec:v:11:y:2007:i:1:p:13-30

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669

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Cited by:
  1. Devadason, Evelyn, 2007. "Do Trading Partners Matter for Labour Market Inequality? The Malaysian Case," Review of Applied Economics, Review of Applied Economics, vol. 3(1-2).
  2. James E. Anderson, 2009. "Globalization and Income Distribution: A Specific Factors Continuum Approach," NBER Working Papers 14643, National Bureau of Economic Research, Inc.
  3. Huong Vu & Steven Lim & Mark Holmes & Tinh Doan, 2012. "Firm Exporting and Employee Benefits: First Evidence from Vietnam Manufacturing SMEs," Working Papers in Economics 12/12, University of Waikato, Department of Economics.
  4. World Bank, 2010. "Exports, Export Destinations, and Skills," World Bank Other Operational Studies 13261, The World Bank.
  5. Vu, Van Huong, 2012. "Does export participation affect wages and employment quality? the case of Vietnamese SMEs," MPRA Paper 38696, University Library of Munich, Germany.
  6. Yoshino, Yutaka, 2008. "Domestic constraints, firm characteristics, and geographical diversification of firm-level manufacturing exports in Africa," Policy Research Working Paper Series 4575, The World Bank.
  7. Page, John, 2011. "Should Africa Industrialize?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).

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