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Wage Differentials among Ownership Groups and Worker Quality in Vietnamese Manufacturing

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  • Kien Trung Nguyen
  • Eric D. Ramstetter

Abstract

Wholly foreign multinational enterprises (WFs), joint-venture multinationals (JVs), state-owned enterprises (SOEs) pay higher wages than domestic private firms in Vietnamese manufacturing. In large samples of medium–large (20+ employees) firms, conditional differentials accounting for worker education and occupation, as well as capital intensity, size, and shares of female workers, were substantially smaller, but positive and significant. Wage levels and differentials varied substantially among industries. Conditional differentials remained positive and significant for WFs and JVs in most of the 11 industries examined, but estimates of SOE-private differentials were insignificant in most industries. Robustness checks using 2007 data yielded similar results.

Suggested Citation

  • Kien Trung Nguyen & Eric D. Ramstetter, 2017. "Wage Differentials among Ownership Groups and Worker Quality in Vietnamese Manufacturing," Global Economic Review, Taylor & Francis Journals, vol. 46(3), pages 232-250, July.
    • Handle: RePEc:taf:glecrv:v:46:y:2017:i:3:p:232-250
    DOI: 10.1080/1226508X.2017.1298459
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    References listed on IDEAS

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    1. Eric D. Ramstetter, 2014. "Wage Differentials between Foreign Multinationals and Local Plants and Worker Quality in Malaysian Manufacturing," Asian Development Review, MIT Press, vol. 31(2), pages 55-76, September.
    2. Lim, David, 1977. "Do foreign companies pay higher wages than their local counterparts in Malaysian manufacturing?," Journal of Development Economics, Elsevier, vol. 4(1), pages 55-66, February.
    3. Lipsey, Robert E. & Sjoholm, Fredrik, 2004. "Foreign direct investment, education and wages in Indonesian manufacturing," Journal of Development Economics, Elsevier, vol. 73(1), pages 415-422, February.
    4. Ramstetter, Eric D. & Narjoko, Dionisius, 2013. "Wage Differentials between Foreign Multinationals and Local Plants and Worker Education in Indonesian Manufacturing," AGI Working Paper Series 2013-23, Asian Growth Research Institute.
    5. Robert E. Lipsey, 2004. "Home- and Host-Country Effects of Foreign Direct Investment," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 333-379, National Bureau of Economic Research, Inc.
    6. Emiko Fukase, 2014. "Foreign Wage Premium, Gender and Education: Insights from Vietnam Household Surveys," The World Economy, Wiley Blackwell, vol. 37(6), pages 834-855, June.
    7. Emiko Fukase, 2014. "Job Opportunities in Foreign Firms and Internal Migration in Vietnam," Asian Economic Journal, East Asian Economic Association, vol. 28(3), pages 279-299, September.
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    Cited by:

    1. Tien Manh Vu & Hiroyuki Yamada & Tsunehiro Otsuki, 2017. "Rise and Fall of Multinational Enterprises in Vietnam: Survival Analysis Using Census Data during 2000–2011-super-," Asian Economic Journal, East Asian Economic Association, vol. 31(1), pages 83-109, March.
    2. Dang, Thang, 2017. "Education as Protection? The Effect of Schooling on Non-Wage Compensation in a Developing Country," MPRA Paper 79223, University Library of Munich, Germany.
    3. Ramstetter, Eric D., 2018. "Foreign Multinationals and Vietnamese Firm Exports, 2010-2013," AGI Working Paper Series 2018-04, Asian Growth Research Institute.
    4. Ramstetter, Eric D., 2016. "Multinational Enterprise Growth and Vietnam's Employment and Wages in Manufacturing and Trade Industries: Did Takeovers Play a Role?," AGI Working Paper Series 2016-05, Asian Growth Research Institute.
    5. Ramstetter, Eric D., 2017. "Foreign Workers, Foreign Multinationals, and Wages after Controlling for Occupation and Sex in Malaysia’s Manufacturing Plants during the mid-1990s," AGI Working Paper Series 2017-13, Asian Growth Research Institute.
    6. Ramstetter, Eric D., 2017. "How important are SOEs and MNEs in Vietnam’s economy?," AGI Working Paper Series 2017-09, Asian Growth Research Institute.
    7. Kien Trung Nguyen & Eric D. Ramstetter, 2019. "Ownership-Related Wage Differentials By Occupation In Vietnamese Manufacturing," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(03), pages 625-645, June.
    8. Ramstetter, Eric D., 2018. "Foreign Ownership and Exports of Thai Manufacturing Plants by Industry in 1996," AGI Working Paper Series 2018-05, Asian Growth Research Institute.
    9. Thuyen, Truong Thi Ngoc & Jongwanich, Juthathip & Ramstetter, Eric D., 2017. "Trade protection and productivity differentials between multinationals and local firms in Vietnamese manufacturing," AGI Working Paper Series 2017-01, Asian Growth Research Institute.

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    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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