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Ownership and wages: Spatial econometric approach

Author

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  • Ogorevc, Marko
  • Verbič, Miroslav

Abstract

The aim of our paper is to disentangle the relationship between ownership and wages using cross-section data for Slovenian medium size and large companies, where we account for spatial dependencies in wage determination. Space here is not considered in geographical context, but as a set of relations between firms originating from the same owner. Using a detailed database on Slovenian ownership, we apply a spatial econometric approach to detect any ownership-based wage spillovers, while accounting for different standard factors, such as size, capital intensity and productivity, and also some ownership-based variables, such as ownership concentration and ratio of cash-flow to control rights. Our results indicate that ownership is an important factor in explaining differences in wage levels. Many large owners divert cash-flow into their own pockets which has a detrimental effect on wages and indicates that this behaviour induced by owners is not sustainable.

Suggested Citation

  • Ogorevc, Marko & Verbič, Miroslav, 2012. "Ownership and wages: Spatial econometric approach," MPRA Paper 38915, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38915
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    References listed on IDEAS

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    2. Ghosh, Saibal, 2009. "Do productivity and ownership really matter for growth? Firm-level evidence," Economic Modelling, Elsevier, vol. 26(6), pages 1403-1413, November.
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    6. Winter-Ebmer, Rudolf & Zweimuller, Josef, 1999. "Intra-Firm Wage Dispersion and Firm Performance," Kyklos, Wiley Blackwell, vol. 52(4), pages 555-572.
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    More about this item

    Keywords

    spatial econometrics; ownership; wage differentials; sustainability;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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