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Foreign Firms and Indonesian Manufacturing Wages: An Analysis with Panel Data

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  • Sjoholm, Fredrik
  • Lipsey, Robert E

Abstract

This article examines the effect of foreign direct investment (FDI) on wages in Indonesian manufacturing. An econometric analysis of a panel of plants between 1975 and 1999 finds that both foreign ownership throughout the period and foreign takeover resulted in higher wages relative to domestically owned plants. The wage effects for white-collar employees were typically around twice those for blue-collar employees. The effect of foreign ownership on wages differed among sectors but was always positive.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 55 (2006)
Issue (Month): 1 (October)
Pages: 201-21

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Handle: RePEc:ucp:ecdecc:y:2006:v:55:i:1:p:201-21

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Web page: http://www.journals.uchicago.edu/EDCC/

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  1. Huizinga, H.P., 1990. "Unions, taxes and the structure of multinational enterprises," Open Access publications from Tilburg University urn:nbn:nl:ui:12-155108, Tilburg University.
  2. Aitken, B. & Harrison, A. & Lipsey, R.E., 1995. "Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela, and the United States," Papers 95-21, Columbia - Graduate School of Business.
  3. Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.
  4. Mark E. Doms & J . Bradford Jensen, 1998. "Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 235-258 National Bureau of Economic Research, Inc.
  5. Robert E. Lipsey & Fredrik Sjoholm, 2001. "Foreign Direct Investment and Wages in Indonesian Manufacturing," NBER Working Papers 8299, National Bureau of Economic Research, Inc.
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