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Does the Country of Origin of FDI Impact Wages in the Host Country? Evidence From Indian Manufacturing Firms

Author

Listed:
  • Gupta, Arpit
  • Chicker, Soumya
  • Chand, A.K.Srustidhar
  • Prasad Sahu, Jagadish

Abstract

The paper aims to empirically demonstrate the country-of-origin effects of FDI on wages in the Indian manufacturing sector. We have employed firm-level panel data by mapping FDI and PROWESS data for the time period 2011-12 to 2020-21. Our results show that FDI has a significant positive impact on wages in the Indian manufacturing sector. Furthermore, we find that FDI from the USA has a significant positive impact on average wages. We also find that direct investment coming from tax haven countries (Mauritius, Cayman Islands, and Cyprus) has a positive impact on wages. Our results suggest that the average wage of the Indian manufacturing firms receiving FDI from the USA are significantly higher than the other firms. On the other hand, FDI from Asia and Europe does not have statistically significant impact on wages.

Suggested Citation

  • Gupta, Arpit & Chicker, Soumya & Chand, A.K.Srustidhar & Prasad Sahu, Jagadish, 2026. "Does the Country of Origin of FDI Impact Wages in the Host Country? Evidence From Indian Manufacturing Firms," EconStor Preprints 344190, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:344190
    DOI: 10.2139/ssrn.7630339
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