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Foreign Ownership and Labour Markets in Sub-Saharan African Firms


  • Neil Foster-McGregor

    () (The Vienna Institute for International Economic Studies, wiiw)

  • Anders Isaksson
  • Florian Kaulich


Abstract In this paper we examine whether foreign-owned firms pay higher wages and have higher levels of employment than domestically-owned firms in a cross-section of sub-Saharan African (SSA) firms using data from 19 SSA countries. We also test for the presence of wage spillovers, examining whether the wages offered by foreign-owned firms in an industry impact upon the wages paid by domestically-owned firms. Our results indicate that foreign-owned firms tend to pay higher average wages, employ more workers and generate positive human capital effects. This tends to be true for total employment and average wages for all workers as well as for blue- and white-collar workers separately. The effects of foreign ownership tend to be stronger for white-collar workers when considering wages and for blue-collar workers when considering employment. Our results also suggest that the presence of foreign-owned firms does not significantly impact upon the wages paid by domestically-owned firms however.

Suggested Citation

  • Neil Foster-McGregor & Anders Isaksson & Florian Kaulich, 2013. "Foreign Ownership and Labour Markets in Sub-Saharan African Firms," wiiw Working Papers 99, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:wpaper:99

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    References listed on IDEAS

    1. Blomstrom, Magnus & Kokko, Ari, 1998. " Multinational Corporations and Spillovers," Journal of Economic Surveys, Wiley Blackwell, vol. 12(3), pages 247-277, July.
    2. 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.
    3. 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.
    4. Roger Bandick & Patrik Karpaty, "undated". "Foreign Acquisition and Employment Effects in Swedish Manufacturing," Discussion Papers 07/35, University of Nottingham, GEP.
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    1. repec:eee:mulfin:v:40:y:2017:i:c:p:103-114 is not listed on IDEAS
    2. repec:spr:weltar:v:153:y:2017:i:4:d:10.1007_s10290-017-0287-z is not listed on IDEAS
    3. Asongu, Simplice A., 2017. "Assessing marginal, threshold, and net effects of financial globalisation on financial development in Africa," Journal of Multinational Financial Management, Elsevier, vol. 40(C), pages 103-114.
    4. Rod Falvey & Neil Foster-McGregor, 2017. "Heterogeneous effects of bilateral investment treaties," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(4), pages 631-656, November.
    5. Neil Foster-McGregor & Anders Isaksson & Florian Kaulich, 2016. "Importing, Productivity and Absorptive Capacity in Sub-Saharan African Manufacturing and Services Firms," Open Economies Review, Springer, vol. 27(1), pages 87-117, February.
    6. Simplice Asongu & Pritam Singh & Sara Le Roux, 2016. "Fighting Software Piracy: Some Global Conditional Policy Instruments," Working Papers 16/004, African Governance and Development Institute..
    7. Asongu, Simplice & De Moor, Lieven, 2015. "Financial globalisation and financial development in Africa: assessing marginal, threshold and net effects," MPRA Paper 69448, University Library of Munich, Germany.
    8. Ahmed Fayez Abdelgouad & Christian Pfeifer & John P Weche Gelübcke, 2015. "Ownership structure and firm performance in the Egyptian manufacturing sector," Economics Bulletin, AccessEcon, vol. 35(4), pages 2197-2212.

    More about this item


    foreign ownership; employment; wage premium;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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