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Foreign Ownership and Wages in the United States, 1987 - 1992

Author

Listed:
  • Zadia Feliciano
  • Robert E. Lipsey

Abstract

Foreign-owned establishments in the United States pay higher wages, on average, than domestically-owned establishments. Much of the difference is related to industry composition, but there are also differences within industries within states, 5-7 percent in manufacturing and 9-10 percent in other industries. Within manufacturing, the difference can all be related to establishment, state, and industry characteristics, but in other industries, a substantial difference in average wages in favor of foreign establishments remains even when these other determinants of wages are taken into account. Within manufacturing, the extent of foreign ownership in an industry in a state had no impact on wages in 1987 when these other factors were taken into account, but it was associated with higher wages in 1992. Outside of manufacturing, higher foreign ownership was associated with higher wages in both years, and in 1992, even with higher-wages in domestically-owned establishments. Outside of manufacturing, larger increases in foreign ownership in an industry in a state between 1987 and 1992 were associated with larger increases in average wages. The wage effect was confined to the foreign-owned establishments themselves.

Suggested Citation

  • Zadia Feliciano & Robert E. Lipsey, 1999. "Foreign Ownership and Wages in the United States, 1987 - 1992," NBER Working Papers 6923, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6923
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    References listed on IDEAS

    as
    1. Robert E. Lipsey, 1994. "Foreign-Owned Firms and U.S. Wages," NBER Working Papers 4927, National Bureau of Economic Research, Inc.
    2. Aitken, Brian & Harrison, Ann & Lipsey, Robert E., 1996. "Wages and foreign ownership A comparative study of Mexico, Venezuela, and the United States," Journal of International Economics, Elsevier, vol. 40(3-4), pages 345-371, May.
    3. Edward M. Graham & Paul Krugman, 1995. "Foreign Direct Investment in the United States, 3rd Edition," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 52.
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    Cited by:

    1. Almeida, Rita K., 2003. "The Effects of Foreign Owned Firms on the Labor Market," IZA Discussion Papers 785, Institute for the Study of Labor (IZA).
    2. Nathalie Havet, 2006. "La valorisation salariale et professionnelle de la formation en entreprise diffère-t-elle selon le sexe ? L'exemple canadien," Économie et Prévision, Programme National Persée, vol. 175(4), pages 147-161.
    3. Konings, Jozef, 2004. "The employment effects of foreign direct investment," EIB Papers 4/2004, European Investment Bank, Economics Department.
    4. Robbins, Donald J., 2003. "The impact of trade liberalization upon inequality in developing countries : a review of theory and evidence," ILO Working Papers 993650553402676, International Labour Organization.
    5. Dierk Herzer & Philipp Hühne & Peter Nunnenkamp, 2014. "FDI and Income Inequality—Evidence from Latin American Economies," Review of Development Economics, Wiley Blackwell, vol. 18(4), pages 778-793, November.
    6. John S. Earle & Álmos Telegdy, 2007. "Ownership and Wages: Estimating Public-Private and Foreign-Domestic Differentials using LEED from Hungary, 1986-2003," NBER Working Papers 12997, National Bureau of Economic Research, Inc.
    7. Neil Foster-McGregor & Anders Isaksson & Florian Kaulich, 2015. "Foreign Ownership and Labour in Sub-Saharan African Firms," African Development Review, African Development Bank, vol. 27(2), pages 130-144, June.
    8. Eckhardt Bode & Peter Nunnenkamp, 2011. "Does foreign direct investment promote regional development in developed countries? A Markov chain approach for US states," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(2), pages 351-383, June.
    9. Martyn Andrews, & Lutz Bellmann, & Thorsten Schank, & Richard Upward, "undated". "The takeover and selection effects of foreign ownership in Germany: an analysis using linked worker-firm data," Discussion Papers 07/08, University of Nottingham, GEP.
    10. Pfaffermayr, Michael & Bellak, Christian, 2000. "Why foreign-owned firms are different : a conceptual framework and empirical evidence for Austria," HWWA Discussion Papers 115, Hamburg Institute of International Economics (HWWA).
    11. Greenaway, David & Nelson, Douglas, 2000. "The Assessment: Globalization and Labour-Market Adjustment," Oxford Review of Economic Policy, Oxford University Press, vol. 16(3), pages 1-11, Autumn.
    12. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
    13. Oldford, Erin & Otchere, Isaac, 2016. "Are cross-border acquisitions enemy of labor? An examination of employment and productivity effects," Pacific-Basin Finance Journal, Elsevier, vol. 40(PB), pages 438-455.
    14. John S. Earle & Almos Telegdy, 2007. "Ownership and Wages: Estimating Public-Private and Foreign-Domestic Differentials with LEED from Hungary, 1986–2003," Upjohn Working Papers and Journal Articles 07-134, W.E. Upjohn Institute for Employment Research.
    15. John S. Earle & Almos Telegdy, 2009. "Ownership and Wages: Estimating Publi-Private and Foreign-Domestic Differentials with LEED from Hungary, 1986 to 2003," Book chapters authored by Upjohn Institute researchers,in: Stefan Bender & Julia Lane & Kathryn Shaw & Fredrick Andersson & till von Wachter (ed.), The Analysis of Firms and Employees: Quantitative and Qualitative Approaches, pages 229-252 W.E. Upjohn Institute for Employment Research.
    16. Almeida, Rita, 2007. "The labor market effects of foreign owned firms," Journal of International Economics, Elsevier, vol. 72(1), pages 75-96, May.
    17. Csengődi, Sándor & Jungnickel, Rolf & Urban, Dieter M., 2005. "Foreign Takeovers and Wages: Theory and Evidence from Hungary," HWWA Discussion Papers 337, Hamburg Institute of International Economics (HWWA).
    18. repec:ilo:ilowps:365055 is not listed on IDEAS
    19. Saif S. Alhakimi & James Peoples, 2009. "Foreign Direct Investment And Domestic Wages In The Usa," Manchester School, University of Manchester, vol. 77(1), pages 47-64, January.
    20. Pablo M. Pinto & Santiago M. Pinto, 2008. "The Politics Of Investment Partisanship: And The Sectoral Allocation Of Foreign Direct Investment," Economics and Politics, Wiley Blackwell, vol. 20(2), pages 216-254, June.

    More about this item

    JEL classification:

    • 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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