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Wage Spillovers, Inter-regional Effects and the Impact of Inward Investment

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  • Nigel Driffield
  • Karl Taylor

Abstract

Abstract This paper evaluates the extent of inter-industry and inter-regional wage spillovers across the UK. An extensive body of literature exists suggesting that wages elsewhere affect wage determination and levels of satisfaction, but this paper extends the analysis of wage determination to examine the effects of inward investment in the process. Thus far the specific effect of foreign wages on domestic wage determination has not been evaluated. We employ industry- and regional-level panel data for the UK, and contrast results from alternative approaches to space-time modelling. Each supports the notion that such wage spillovers do occur, though assumptions made concerning the modelling of spatial interaction are important. Further, such wage spillovers are more widespread for skilled than for unskilled workers and also lower in areas of high unemployment.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Spatial Economic Analysis.

Volume (Year): 1 (2006)
Issue (Month): 2 ()
Pages: 187-205

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Handle: RePEc:taf:specan:v:1:y:2006:i:2:p:187-205

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Related research

Keywords: Wage determination; regional spillovers; alternative wage; J21; J30;

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Cited by:
  1. Mitze, Timo & Stephan, Andreas, 2013. "Simultaneous-equations Analysis in Regional Science and Economic Geography," Working Paper Series in Economics and Institutions of Innovation 309, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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