Foreign Direct Investment and Wage Inequality: Evidence from China

Zhihong Chen, Ying Ge and Huiwen Lai

World Development, 2011, vol. 39, issue 8, 1322-1332

Abstract: Summary This study provides micro-level evidence on the close link between foreign participation and wage inequality. We investigate the wage premium and the wage spillover effect of foreign-invested enterprises in the Chinese manufacturing sector. The results indicate a significant foreign premium in both wage and non-wage compensation. The presence of foreign and Hong Kong, Macao and Taiwan (HMT) investment results in a significantly negative spillover in terms the wage level in domestic firms, and discourages wage growth in such firms. Overall, the evidence suggests that exposure to foreign investment increases inter-enterprise wage inequality.

Keywords: wage; inequality; globalization; Asian; China (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (67)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:39:y:2011:i:8:p:1322-1332

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