IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Foreign Workers, Foreign Multinationals, and Wages after Controlling for Occupation and Sex in Malaysia’s Manufacturing Plants during the mid-1990s

Listed author(s):
  • Ramstetter, Eric D.
Registered author(s):

    This paper investigates the effects of foreign worker shares and MNE ownership on wages after controlling for worker sex and occupation in Malaysian manufacturing plants during 1994-1996, an important period during which use of foreign workers began to increase substantially. In a previous paper, I estimated similar wage equations separately for five occupation groups of both sexes in large heterogeneous samples of plants in many industries and more homogeneous samples of plants in seven industries. Results indicated that use of foreign workers generally had insignificant effects on plant wages for most occupation-sex-(and industry) combinations and that that MNE-local differentials were almost always insignificant in three industries and consistently significant in only one. Although separate estimation by sex and occupation has the strong advantage of accounting for worker characteristics relatively well, it has the disadvantages of complexity (10 results per sample) and being difficult to compare to more common approaches, which use sex and occupation as controls. The primary purpose of this paper is thus to see if using sex and occupation as independent variables generates results that differ from estimating wage equations separately for each sex-occupation cohort. Results suggest that the effects of foreign worker shares differ substantially among foreign worker occupations and among industries. Plants that have relatively large foreign manager shares tend to pay relatively high wages in most industries, but the effects of other foreign worker occupations are usually insignificant or inconsistent. Results that assume all foreign workers impart the same effects thus appear misleading, as do results assuming identical slope coefficients among industries. Similar to previous estimates, MNE-local wage differentials were consistently positive and significant in only two relatively small industries, chemicals and food, in marked contrast to previous results for 2000-2004, which did not account for the effects of foreign worker shares.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://id.nii.ac.jp/1270/00000133/
    Download Restriction: no

    File URL: https://agi.repo.nii.ac.jp/?action=repository_action_common_download&item_id=155&item_no=1&attribute_id=22&file_no=1
    Download Restriction: no

    Paper provided by Asian Growth Research Institute in its series AGI Working Paper Series with number 2017-13.

    as
    in new window

    Length:
    Date of creation: Jul 2017
    Handle: RePEc:agi:wpaper:00000133
    Contact details of provider: Postal:
    11-4 Otemachi, Kokurakita, Kitakyushu, 803-0814

    Phone: +81-93-583-6202
    Fax: +81-93-583-6576
    Web page: http://www.agi.or.jp/
    Email:


    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    1. Ramstetter, Eric D. & Nguyen, Kien Trung, 2015. "Wage Differentials among Ownership Groups and Worker Quality in Vietnamese Manufacturing," AGI Working Paper Series 2015-05, Asian Growth Research Institute.
    2. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
    3. Caves,Richard E., 2007. "Multinational Enterprise and Economic Analysis," Cambridge Books, Cambridge University Press, number 9780521677530.
    4. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2011. "Substitution Between Immigrants, Natives, and Skill Groups," NBER Working Papers 17461, National Bureau of Economic Research, Inc.
    5. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, January.
    6. Branko Milanovic, 2006. "Inequality and Determinants of Earnings in Malaysia, 1984-1997 ," Asian Economic Journal, East Asian Economic Association, vol. 20(2), pages 191-216, June.
    7. Alan Rugman, 1980. "Internalization as a general theory of foreign direct investment: A re-appraisal of the literature," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(2), pages 365-379, June.
    8. Lipsey, Robert E. & Sjoholm, Fredrik, 2004. "Foreign direct investment, education and wages in Indonesian manufacturing," Journal of Development Economics, Elsevier, vol. 73(1), pages 415-422, February.
    9. Athukorala, Prema-chandra & Devadason, Evelyn S., 2012. "The Impact of Foreign Labor on Host Country Wages: The Experience of a Southern Host, Malaysia," World Development, Elsevier, vol. 40(8), pages 1497-1510.
    10. Ramstetter, Eric D. & Narjoko, Dionisius, 2013. "Wage Differentials between Foreign Multinationals and Local Plants and Worker Education in Indonesian Manufacturing," AGI Working Paper Series 2013-23, Asian Growth Research Institute.
    11. Mark Casson, 1987. "The Firm and the Market: Studies on the Multinational Enterprise and the Scope of the Firm," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031299, January.
    12. Caves,Richard E., 2007. "Multinational Enterprise and Economic Analysis," Cambridge Books, Cambridge University Press, number 9780521860130.
    13. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
    14. Galina Hale & Cheryl Long, 2011. "Did Foreign Direct Investment Put an Upward Pressure on Wages in China?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 59(3), pages 404-430, August.
    15. Eric D. Ramstetter, 2014. "Wage Differentials between Foreign Multinationals and Local Plants and Worker Quality in Malaysian Manufacturing," Asian Development Review, MIT Press, vol. 31(2), pages 55-76, September.
    16. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
    17. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:agi:wpaper:00000133. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kazuki Tamura)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.