The Labor Market Effects of Foreign-Owned Firms
Foreign firms often have a more educated workforce and pay higher wages than domestic firms. This does not necessarily imply that foreign ownership translates into higher demand for educated workers or higher wages, since foreign investment may be...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/05/4264194/labor-market-effects-foreign-owned-firms http://hdl.handle.net/10986/14087 |
| Summary: | Foreign firms often have a more educated
workforce and pay higher wages than domestic firms. This
does not necessarily imply that foreign ownership translates
into higher demand for educated workers or higher wages,
since foreign investment may be guided by unobservable firm
characteristics correlated with the demand for educated
workers or wages. The author examines foreign acquisitions
of domestic firms in Portugal in the 1990s and finds small
changes in the workforce skill composition and wages
following acquisition. Foreign investors "cherry
pick" domestic firms that are already very similar to
the group of existing foreign firms. |
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