Measurements and Determinants of Pay Inequality and its Impacts on Firms Performance in Vietnam
AbstractThis study is an empirical investigation of causal factors of pay inequality and its relationship with firm performance using firm level data in Vietnam. Both nonparametric and parametric approaches are used for the purpose. The Gini coefficient and Theil-T index are employed to measure pay inequality. Linear and quadratic models are specified to identify determinants of pay inequality and to investigate the relationship between pay inequality and firm performance. The empirical results, based on a large sample of Vietnamese firms, suggest that capital-intensive sectors pay more equal wages than labour-intensive sectors while regions with a higher urbanization rate and economic development pay their employees quite unequally. The determinant factors contributing to pay inequality are firm size, volume of assets, share of temporary workers, debt ratio, provincial competitiveness and the market size. We also find a positive relationship between firm performance and pay inequality, which gives support to the ¡°tournament¡± theory.
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Bibliographic InfoPaper provided by Seoul National University; Technology Management, Economics, and Policy Program (TEMEP) in its series TEMEP Discussion Papers with number 200930.
Length: 34 pages
Date of creation: Nov 2009
Date of revision: Nov 2009
Pay inequality; firms; determinants; performance; Vietnam;
Find related papers by JEL classification:
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
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