Multinational companies and wage inequality in the host country: The case of Ireland

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractIn this paper, we analyse the effects of multinational companies on wage inequality in the host country, studying the case of the Irish economy. Based on a model developed by Aghion and Howitt (1998), in which the introduction of new technologies leads to increasing demand for skilled labour and, therefore, to rising inequality, we conduct an econometric study using data for the Irish manufacturing sector between 1979 and 1995. We examine inequality between wages for skilled and unskilled labour within the same manufacturing sector. Our results indicate that there is an inverted-U relationship between wage inequality and the presence of multinationals, i.e., with increasing presence of multinationals, wage inequality first increases, reaches a maximum and decreases eventually, ceteris paribus.

Evaluating the foreign ownership wage premium using a difference-in-differences matching approach

“…Furthermore, acquisitions cannot be observed directly in the data, but only indirectly as firms that change their ownership status from being "independent" to Another related, yet different, research question is whether multinationals increase the demand for skilled labour. See, for example, Slaughter (2000) and Figini and Görg (1999) for such studies. 3 However, this differential disappears when labour productivity is added as a regressor, indicating that the wage difference can be wholly attributed to productivity differences between foreign and domestic firms.…”

The Distributive Effects of Joining the Global Economy in Iran: the Application of ARDL Model

“…Feenstra and Hanson (1997) argued that FDI flows into developing countries cause a higher wage for skilled workers than unskilled workers, resulting in widened income inequalities. Figini and Gorg (1999) argued that, initially, wage inequality increases with the FDI inflows, but, as blue-collar workers become skilled, that decreases in turn. Feenstra and Hanson's (1997) and Figini and Gorg's (1999) works were restricted to the Mexican and Irish cases, respectively and they did not compare the explanatory powers of the competing hypotheses.…”

“…Figini and Gorg (1999) argued that, initially, wage inequality increases with the FDI inflows, but, as blue-collar workers become skilled, that decreases in turn. Feenstra and Hanson's (1997) and Figini and Gorg's (1999) works were restricted to the Mexican and Irish cases, respectively and they did not compare the explanatory powers of the competing hypotheses. Harrison and Hanson (1999) for Mexican economy and Barro (2002), for some of the nation showed that increased trade will worsen the income distribution .…”

Does German Foreign Direct Investment Lead to Job Losses at Home?

“…Following the large literature on employment and wage determination (see for example Brainard and Riker 1997b;Figini andGaerg 1999 andGirma 2003) we consider two sets of empirical models. The first set is a reduced-form log-linear labour demand model (equation 1) and the second set an equivalent version for average wages (equation 2).…”