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Why Do Foreign Firms Pay More: The Role of On-the-Job-Training
Author(s)
Date Issued
2007-10
Date Available
2016-10-13T12:40:42Z
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 firm specific human capital acquisition explanation.
Other Sponsorship
Leverhulme Trust
Type of Material
Journal Article
Publisher
Springer
Journal
Review of World Economics
Volume
143
Issue
3
Start Page
464
End Page
482
Copyright (Published Version)
2007 Kiel Institute
Classification
F23
J24
Language
English
Status of Item
Peer reviewed
This item is made available under a Creative Commons License
File(s)
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Name
rwe_3.pdf
Size
67.99 KB
Format
Adobe PDF
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