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Foreign Direct Investment, Non‐Traded Goods And Real Wages

  • Reza Oladi
  • John Gilbert
  • Hamid Beladi

Using a three-sector general equilibrium model with non-traded goods, we investigate the impact of foreign direct investment on the real wages of skilled and unskilled workers. We show that foreign direct investment increases the real wages of skilled and unskilled workers, but widens the gap between the two under plausible conditions.

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File URL: http://hdl.handle.net/10.1111/j.1468-0106.2010.00512.x
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Article provided by Wiley Blackwell in its journal Pacific Economic Review.

Volume (Year): 16 (2011)
Issue (Month): 1 (02)
Pages: 36-41

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Handle: RePEc:bla:pacecr:v:16:y:2011:i:1:p:36-41
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  1. Hamid Beladi & Ravi Batra, 2004. "Traded and Nontraded Goods and Real Wages," Review of Development Economics, Wiley Blackwell, vol. 8(1), pages 1-14, 02.
  2. Das, Satya P., 2002. "Foreign direct investment and the relative wage in a developing economy," Journal of Development Economics, Elsevier, vol. 67(1), pages 55-77, February.
  3. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc.
  4. Katz, L.F. & Murphy, K.M., 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Harvard Institute of Economic Research Working Papers 1580, Harvard - Institute of Economic Research.
  5. Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
  6. Batra, Raveendra N, 1973. "Nontraded Goods, Factor Market Distortions, and the Gains from Trade," American Economic Review, American Economic Association, vol. 63(4), pages 706-13, September.
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