Why Do Foreign-Owned Firms Pay More? The Role of On-the-Job Training

Holger Görg, Eric Strobl () and Frank Walsh

Chapter 3 in Multinational Enterprises and Host Country Development, 2016, pp 33-51 from World Scientific Publishing Co. Pte. Ltd.

Abstract: While foreign-owned firms have consistently been found to pay higher wages than domestic firms to what appear to be equally productive workers, the causes of this remain unresolved. In a two-period bargaining framework we show that if training is more productive and specific in foreign firms, foreign firm workers will have a steeper wage profile and thus acquire a premium over time. Using a rich employer-employee matched data set we verify that the foreign wage premium is only acquired by workers over time spent in the firm and only by those that receive on-the-job training, thus providing empirical support for a firmspecific human capital acquisition explanation.

Keywords: Multinational Enterprises; Foreign Direct Investment; Spillovers; Development; Host Country (search for similar items in EconPapers)
Date: 2016
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Related works:
Journal Article: Why Do Foreign-Owned Firms Pay More? The Role of On-the-Job Training (2007)
Working Paper: Why Do Foreign-Owned Firms Pay More? The Role of On-the-Job Training (2007)
Working Paper: Why Do Foreign-Owned Firms Pay More? The Role of On-the-Job Training (2002)
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