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The Effect of Foreign Affiliate Employment on Wages, Employment, and the Wage Share in Austria

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  • Özlem Onaran

Abstract

This paper estimates the effects of outward Foreign Direct Investment (employment in affiliates abroad) on employment, wages and the wage share in Austria using panel data for the period 1996--2005. There is evidence of significant negative effects of FDI on both employment and wages, and consequently on the wage share. The results are not limited to workers in low-skilled sectors. The negative employment effect is mainly due to the rise in employment in the foreign affiliates in Eastern Europe. The negative wage effects originate from affiliate employment in both Eastern Europe and the developed countries in the industrial sector, but FDI in Eastern Europe has positive wage effects in the services sector due to possible scope effects.

Suggested Citation

  • Özlem Onaran, 2012. "The Effect of Foreign Affiliate Employment on Wages, Employment, and the Wage Share in Austria," Review of Political Economy, Taylor & Francis Journals, vol. 24(2), pages 251-271, April.
  • Handle: RePEc:taf:revpoe:v:24:y:2012:i:2:p:251-271
    DOI: 10.1080/09538259.2012.664335
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    References listed on IDEAS

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    Cited by:

    1. Onaran, Özlem & Guschanski, Alexander, 2016. "The political economy of income distribution: industry level evidence from Austria," Greenwich Papers in Political Economy 15865, University of Greenwich, Greenwich Political Economy Research Centre.

    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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