MNEs and Wages : the Role of Productivity Spillovers and Imperfect Labor Market
AbstractDisentangling the labor market implications of increased foreign capital flows remains important. This paper provides a unifying framework allowing to study the wage implications of multinational enterprise (MNE) activities, pointing to the importance of controlling for both labor market imperfections and productivity spillovers from foreign to local firms. Results show that increased MNE activities increase average wages in the local economy while contributing to a larger wage dispersion between the MNE and local firms. While the results pertaining to average wages depends heavily on the frictions in the labor market, how much the wage dispersion alters also depends on the extent of productivity spillovers from the MNEs to the local firms and the complementarity between domestic and foreign capital.
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Bibliographic InfoPaper provided by Bilkent University, Department of Economics in its series Departmental Working Papers with number 1002.
Date of creation: 2010
Date of revision:
Other versions of this item:
- Saglam, Bahar Bayraktar & Sayek, Selin, 2011. "MNEs and wages: The role of productivity spillovers and imperfect labor markets," Economic Modelling, Elsevier, vol. 28(6), pages 2736-2742.
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- 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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- Laura Alfaro & Areendam Chanda & Sebnem Kalemli-Ozcan & Selin Sayek, 2006.
"How Does Foreign Direct Investment Promote Economic Growth? Exploring the Effects of Financial Markets on Linkages,"
DEGIT Conference Papers
c011_023, DEGIT, Dynamics, Economic Growth, and International Trade.
- Areendam Chanda & Laura Alfaro & Sebnem Kalemli-Ozcan & Selin Sayek, . "How Does Foreign Direct Investment Promote Economic Growth? Exploring the Effects of Financial Markets on Linkages," Departmental Working Papers 2006-13, Department of Economics, Louisiana State University.
- Laura Alfaro & Areendam Chanda & Sebnem Kalemli-Ozcan & Selin Sayek, 2006. "How Does Foreign Direct Investment Promote Economic Growth? Exploring the Effects of Financial Markets on Linkages," NBER Working Papers 12522, National Bureau of Economic Research, Inc.
- Kalemli-Özcan, Sebnem & Chanda, Areendam & Alfaro, Laura & Sayek, Selin, 2007. "How Does Foreign Direct Investment Promote Economic Growth? Exploring The Effects Of Financial Markets On Linkages," Proceedings of the German Development Economics Conference, GÃ¶ttingen 2007 28, Verein für Socialpolitik, Research Committee Development Economics.
- Davidson, Carl & Matusz, Steven J. & Shevchenko, Andrei, 2008. "Globalization and firm level adjustment with imperfect labor markets," Journal of International Economics, Elsevier, vol. 75(2), pages 295-309, July.
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