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FDI, Technology Spillovers, and Wages

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  • Dieter M. Urban

Abstract

This study distinguishes multinational firm (MNE) technology-spillover from learning effects. Whenever learning takes time, the model predicts that foreign investors deduct the economic value of learning from wages of inexperienced workers and add it to experienced ones to prevent them from moving to local competitors. Hence, the national wage bill is unaffected by the presence of MNEs. In contrast to learning, technology spillover effects occur whenever a worker with MNE experience contributes more to local firms' than to MNEs' productivity. In this case, experienced MNE workers are hired by indigenous firms and the host country obtains a welfare gain from the presence of MNEs. Copyright � 2010 Blackwell Publishing Ltd.

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Bibliographic Info

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

Volume (Year): 18 (2010)
Issue (Month): 3 (08)
Pages: 443-453

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Handle: RePEc:bla:reviec:v:18:y:2010:i:3:p:443-453

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  1. Heyman, Fredrik & Gustavsson Tingvall, Patrik & Sjöholm, Fredrik, 2006. "Is There Really a Foreign Ownership Wage Premium? Evidence from Matched Employer-Employee Data," Working Paper Series, Research Institute of Industrial Economics 674, Research Institute of Industrial Economics.
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  4. Markusen, James R. & Rutherford, Tom, 2004. "Learning on the Quick and Cheap: Gains from Trade Through Imported Expertise," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4504, C.E.P.R. Discussion Papers.
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Cited by:
  1. Sándor Csengödi & Dieter M. Urban, 2008. "Foreign Takeovers and Wage Dispersion in Hungary," CESifo Working Paper Series 2188, CESifo Group Munich.
  2. Hudea Caraman, Oana Simona & Stancu, Stelian, 2012. "Foreign Direct Investments, Technology Transfer and Economic Growth. A Panel Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 85-102, June.

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