FDI Technology Spillovers and Wages

Dieter Urban

No 2132, CESifo Working Paper Series from CESifo

Abstract: This study distinguishes multinational firm (MNE) technology-spillover from learning effects. Whenever learning takes time, the model predicts that foreign investors deduct the economic value of learning from wages of inexperienced workers and add it to experienced ones to prevent them from moving to local competitors. Hence, the national wage bill is unaffected by the presence of MNEs. In contrast to learning, technology spillover effects occur whenever a worker with MNE experience contributes more to local firms’ than to MNEs’ productivity. In this case, experienced MNE workers are hired by indigenous firms and the host country obtains a welfare gain from the presence of MNEs. Implications of this model for the empirical findings of the MNE wage premium and the empirical FDI technology spillover literature are also discussed.

Keywords: FDI; foreign takeover; cross-border M&A; FDI technology spillover (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: FDI, Technology Spillovers, and Wages (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2132

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