Work

Wages and Foreign Ownership: A Comparative Study of Mexico, Venezuela and the United States

Year: 1995

Type: report

Abstract: This paper explores the relationship between wages and foreign investment in Mexico, Venezuela, and the United States. Despite very different economic conditions and levels of development, we find one fact which is robust across all three countries: higher levels of foreign investment are associated with higher wages. In Mexico and Venezuela, foreign investment was associated with higher wages only for foreign-owned firms -- there is no evidence of wage spillovers leading to higher wages for domestic firms. In the United States there is evidence of wage spillovers. The lack of spillovers in Mexico and Venezuela is consistent with significant wage differentials between foreign and domestic enterprises. In the United States, wage differentials are smaller.

Source: National Bureau of Economic Research

DOI: 10.3386/w5102

Authors: Brian Aitken, Ann Harrison, Robert Lipsey

Institutions: International Monetary Fund, National Bureau of Economic Research, University of California, Berkeley

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities

Open Access status: green

OpenAlex ID: W1997918151

Cites: 12

Cited by: 187

Related to: 10