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Wage Spillovers In Indian Manufacturing

Author

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  • G. CHIDAMBARAN IYER

    (School of Social Sciences, National Institute of Advanced Studies, Indian Institute of Science Campus, Bangalore 560012, India)

Abstract

The presence of foreign firms might lead to movement of skilled labor from domestic firms. To prevent such movement, domestic firms could increase their wages. Also, productivity spillovers from foreign firms may increase the productivity of domestic firms and possibly the wages given in domestic firms. In this paper, we try to answer whether the wages offered by domestic firms to their labor is affected by the presence of foreign firms. We carry out our analysis for an unbalanced firm-level panel dataset for 6 two-digit industries in Indian manufacturing. We find some evidence for positive wage spillover in three industries.

Suggested Citation

  • G. Chidambaran Iyer, 2012. "Wage Spillovers In Indian Manufacturing," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 57(01), pages 1-19.
    • Handle: RePEc:wsi:serxxx:v:57:y:2012:i:01:n:s0217590812500063
    DOI: 10.1142/S0217590812500063
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    References listed on IDEAS

    as
    1. Rashmi Banga, 2005. "Impact of liberalisation on wages and employment in Indian manufacturing industries," Indian Council for Research on International Economic Relations, New Delhi Working Papers 153, Indian Council for Research on International Economic Relations, New Delhi, India.
    2. Rashmi Banga, 2007. "Impact of Liberalisation on Wages and Employment in Indian Manufacturing Industries," Working Papers id:989, eSocialSciences.
    3. Theodore H. Moran & Edward M. Graham & Magnus Blomstrom, 2005. "Does Foreign Direct Investment Promote Development?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 3810, July.
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    Cited by:

    1. Orlando Gomes, 2017. "Heterogeneous wage setting and endogenous macro volatility," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(1), pages 27-57, April.
    2. Dao Thi Hong Nguyen, 2021. "Are local workers better‐off from foreign presence? A firm‐level panel data analysis of a service industry," Bulletin of Economic Research, Wiley Blackwell, vol. 73(2), pages 276-294, April.
    3. Nguyen, Dao Thi Hong, 2019. "Inward foreign direct investment and local wages: The case of Vietnam’s wholesale and retail industry," Journal of Asian Economics, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Domestic firms; foreign firms; wage spillovers; F23; J31;
    All these keywords.

    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

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