Foreign Direct Investment and Wage Inequality: Evidence from China

Chen, Zhihong; Ge, Ying; Lai, Huiwen

doi:10.1016/j.worlddev.2010.12.006

Cited by 102 publications

(87 citation statements)

References 25 publications

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“…Bustos (2011) observes the positive association between skill upgrading within firms and relative demand for skilled labor in Argentina. Chen, Ge, and Lai (2010) also find that wage inequality in China is driven by foreign direct investment, implying that the transfer of foreign technology in an important source of wage inequality in developing countries. This paper empirically examines the implications that technological changes have for wage inequality in Indonesia, one of the largest and fastest-growing developing economies with some 240 million people.…”

Section: Introductionmentioning

confidence: 87%

Technological Change, Skill Demand, and Wage Inequality: Evidence from Indonesia

Lee

Wie

2015

World Development

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This study provides empirical evidence of the impact that technological progress has on wage inequality in Indonesia. The share of educated workers and their skill premiums have recently increased. A supply-demand analysis, using labor force survey data during 1990-2009, shows that both the between-and within-industry shifts of labor demand that favored skilled workers contributed to the widening wage inequality since the early 2000s. Evidence from firm-level data in the manufacturing sector indicates that the diffusion of foreign technologies through imports and foreign direct investment caused demand to shift toward more skilled labor and increased wage inequality.

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Section: Introductionmentioning

confidence: 87%

Technological Change, Skill Demand, and Wage Inequality: Evidence from Indonesia

Lee

Wie

2015

World Development

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“…For regression specification, the dependent variable ln(R oijt ) denotes the log value of processing exports of firm ownership type o in industry i, province j, and year t. To assess the effects of different policies, we interact the foreign ownership indicator variable F oijt with the encouragement policy 20 Data limitations prevent us from considering "within" industrial skill upgrading, such as in Hsieh and Woo (2005). Corroborative evidence from the National Economic Census in 2004 shows that the employment share of skilled workers in foreign-owned firms is higher than that in other firms (Chen et al, 2011). We match these census data with the Chinese firm-level customs data to identify all processing firms, and we find that the employment share of college graduates in wholly foreign-owned enterprises is 6 percentage points higher than that in other firms.…”

Section: Offshoring and Ownership Structurementioning

confidence: 99%

Offshoring and Wage Inequality: Theory and Evidence from China

Sheng

Yang

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Terms of use: Documents in JEL Classification:F16, J31, D23

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“…Technology externalities from FDI may enhance the efªciency of local ªrms by giving them access to the advanced technology (or intangible ªrm-speciªc assets) of multinationals through several channels, such as imitation, labor mobility, and vertical links (Chen, Ge, and Lai 2011). The positive spillovers will increase the productivity of the domestic manufacturing ªrms, thus resulting in a potential increase in proªtability.…”

Section: Existing Literaturementioning

confidence: 99%

Foreign Entry and Profitability of Domestic Firms: Evidence from China

2013

Asian Economic Papers

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Profitability provides a yardstick for judging the operational efficiency, growth, and survival of a business enterprise. This study investigates the determinants of firm profitability in the Chinese manufacturing sector, with a focus on the impact of foreign entry on the profitability of domestic firms. Our findings show an inverted-U relationship between foreign entry and the profitability of domestic firms. Furthermore, we also find that the effect of foreign entry on domestic firm profitability varies according to the ownership structure of domestic firms and the export intensity of foreign newcomers. the 1 percent level. All the independent variables are lagged one year to mitigate simultaneity issues. Region, sector (two-digit industry), and time dummies are not reported, though they are included in all regressions, and are jointly signiªcant in each regression. Regressions were implemented using -xtreg-commands in Stata 11.0.

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Foreign Direct Investment and Wage Inequality: Evidence from China

Cited by 102 publications

References 25 publications

Technological Change, Skill Demand, and Wage Inequality: Evidence from Indonesia

Technological Change, Skill Demand, and Wage Inequality: Evidence from Indonesia

Offshoring and Wage Inequality: Theory and Evidence from China

Foreign Entry and Profitability of Domestic Firms: Evidence from China

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