Do Multinational Enterprises push up the Wages of Domestic Firms in the Italian Manufacturing Sector?
The present paper aims to test the impact of incoming Foreign Direct Investment (FDI) on local wages in the Italian manufacturing sector by using firm level data from 2002 to 2007. Results initially show the lack of wage spillovers at both horizontal and vertical level, meaning that the effects of foreign investment are completely internalized within each firm. However, when the technology gap is taken into account, we find some evidence of a non-linear relationship between gap size and wage spillover. In particular, if the technological gap between local firms and foreign companies is too large, Multinational Enterprises (MNEs) face some difficulty in interacting with domestic suppliers and customers, with the consequence that they act like monads within the host country. We therefore believe that policies favouring the attraction of inward investments, should not be of the ‘one for all’ or ‘one for always’ type, but must be strongly directed towards the sectoral and local characteristics of the host country.
|Date of creation:||Jul 2012|
|Date of revision:|
|Contact details of provider:|| |
|Order Information:|| Postal: FIW Project Office Austrian Institute of Economic Research Arsenal Objekt 20 A-1030 Vienna|
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.:
- Elena Arnal & Alexander Hijzen, 2008. "The Impact of Foreign Direct Investment on Wages and Working Conditions," OECD Social, Employment and Migration Working Papers 68, OECD Publishing.
- Blomström, Magnus & Sjöholm, Fredrik, 1998.
"Technology Transfer and Spillovers: Does Local Participation with Multinationals Matter?,"
SSE/EFI Working Paper Series in Economics and Finance
268, Stockholm School of Economics.
- Blomstrom, Magnus & Sjoholm, Fredrik, 1999. "Technology transfer and spillovers: Does local participation with multinationals matter?1," European Economic Review, Elsevier, vol. 43(4-6), pages 915-923, April.
- Blomström, Magnus & Sjöholm, Fredrik, 1998. "Technology, Transfer and Spillovers: Does Local Participation With Multinationals Matter?," CEPR Discussion Papers 2048, C.E.P.R. Discussion Papers.
- Magnus Blomstrom & Fredrik Sjoholm, 1998. "Technology Transfer and Spillovers? Does Local Participation with Multinationals Matter?," NBER Working Papers 6816, National Bureau of Economic Research, Inc.
- Sophia Dimelis, 2005. "Spillovers from foreign direct investment and firm growth: technological, financial and market structure effects," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 12(1), pages 85-104.
- Blomström, Magnus & Kokko, Ari, 1996.
"Multinational Corporations and Spillovers,"
CEPR Discussion Papers
1365, C.E.P.R. Discussion Papers.
- Blomström, Magnus & Kokko, Ari, 1996. "Multinational Corporations and Spillovers," SSE/EFI Working Paper Series in Economics and Finance 99, Stockholm School of Economics.
- Ferragina, Anna & Pittiglio, Rosanna & Reganati, Filippo, 2012. "Multinational status and firm exit in the Italian manufacturing and service sectors," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 363-372.
- 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.
- Brian Aitken & Ann Harrison & Robert E. Lipsey, 1995. "Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela and the United States," NBER Working Papers 5102, National Bureau of Economic Research, Inc.
- Aitken, B. & Harrison, A. & Lipsey, R.E., 1995. "Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela, and the United States," Papers 95-21, Columbia - Graduate School of Business.
- Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-94, September.
- M. Ruth & K. Donaghy & P. Kirshen, 2006. "Introduction," Chapters, in: Regional Climate Change and Variability, chapter 1 Edward Elgar.
- Bedi, A.S. & Cieslik, A., 2000.
"Wages and wage growth in Poland : the role of foreign direct investment,"
ISS Working Papers - General Series
19068, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
- Arjun S. Bedi & Andrzej Cielik, 2002. "Wages and wage growth in Poland: The role of foreign direct investment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(1), pages 1-27, March.
- Christopher F Baum, 2006. "An Introduction to Modern Econometrics using Stata," Stata Press books, StataCorp LP, number imeus, November.
- Nigel Driffield & Sourafel Girma, 2003. "Regional Foreign Direct Investment and Wage Spillovers: Plant Level Evidence from the UK Electronics Industry," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 453-474, 09.
- Emilio Colombo & Luca Stanca, 2008. "The Impact of Training on Productivity: Evidence from a Large Panel of Firms," Working Papers 134, University of Milano-Bicocca, Department of Economics, revised Jan 2008.
When requesting a correction, please mention this item's handle: RePEc:wsr:wpaper:y:2012:i:099. 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: ()
If references are entirely missing, you can add them using this form.