Global managers, local workers: Wage setting inside a multinational firm

Virginia Minni

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: How are wages set within a multinational firm? Combining cross-country data on wages and labor regulations with personnel records of a large multinational firm, I find that wage setting depends on the rank of the employee in the firm hierarchy. For managers, wages are set by the headquarters regardless of local labor market conditions. For factory workers, wages are adjusted according to country-specific wages and labor regulations. These results suggest that the multinational's internal labor market shields managers against changes in external market conditions, while the firm adapts to local labor markets for factory workers.

Keywords: multinationals; firm wage-setting; inequality (search for similar items in EconPapers)
Date: 2024-01-24
New Economics Papers: this item is included in nep-int and nep-ure
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Journal Article: Global Managers, Local Workers: Wage Setting inside a Multinational Firm (2024)
Working Paper: Global managers, local workers: wage setting inside a multinational firm (2024)
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