Trade, Foreign Direct Investment and Wage Inequality in China: A Heterogeneous Firms Approach

Theresa Greaney and Yao Li (liyao@uestc.edu.cn)

No 201306, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: We apply insights from the heterogeneous firms’ literature to an empirical investigation of wage inequality in China, focusing on the potential influences of FDI and trade. Using firm-level data, we examine intra-sectoral wage inequality in a major industrial region with firms identified according to five firm ownership types and three exporter status types. We find large ownership-type wage premiums separate from other observable influences on wages, including a firm’s exporter status. Our results indicate that ownership type matters more than exporter status as a determinant in explaining intra-sectoral wage inequality in China’s Yangtze River Delta. We also find evidence of asymmetric wage effects of firm type by exporter status and by other wage determinants.

Keywords: Exporter; pure exporter; foreign direct investment; wage premium; manufacturing; China (search for similar items in EconPapers)
JEL-codes: F16 F23 F66 J31 L60 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2013-04
New Economics Papers: this item is included in nep-int, nep-lma and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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