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Foreign Direct Investment and Wage Spillovers in Vietnam: Evidence from Firm Level Data

Author

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  • Hoi Quoc Le

    (Department of Economics, National Economics University, 207 Giai Phong Road, Hanoi, Vietnam)

Abstract

This paper examines the impact of FDI on wages paid by domestic firms in Vietnam. The existing literature has examined the impact of foreign firms on domestic firms' wage levels within an industry. We expand on the literature by examining interindustry linkages as an additional conduit for wage spillovers. There is strong evidence of horizontal wage spillovers from foreign firms to domestic firms in Vietnam, despite different labour market conditions and firms' characteristics. Vertical wage spillovers exist, but depend on the specific characteristics of firms and industries. A further finding is that training activities facilitate wage spillovers.

Suggested Citation

  • Hoi Quoc Le, 2008. "Foreign Direct Investment and Wage Spillovers in Vietnam: Evidence from Firm Level Data," Working Papers 10, Development and Policies Research Center (DEPOCEN), Vietnam.
    • Handle: RePEc:dpc:wpaper:1008
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    Cited by:

    1. Eric Ramstetter, 2009. "Firm- and Plant-level Analysis of Multinationals in Southeast Asia: the Perils of Pooling Industries and Balancing Panels," Global COE Hi-Stat Discussion Paper Series gd09-106, Institute of Economic Research, Hitotsubashi University.
    2. Duong, Vu Hoang, 2020. "The threshold of absorptive capacity: The case of Vietnamese manufacturing firms," International Economics, Elsevier, vol. 163(C), pages 44-57.
    3. Hans Pitlik & Margit Schratzenstaller-Altzinger, 2011. "Growth Implications of Structure and Size of Public Sectors," WIFO Working Papers 404, WIFO.

    More about this item

    Keywords

    Foreign Investment; Wages; Spillovers; Vietnam;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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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