Foreign Firms, Domestic Wages

Nikolaj Malchow-Møller, Bertel Schjerning, James R. Markusen

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22 Citationer (Scopus)
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Abstract

Three types of theories have been used to explain the wage premium in foreign firms: the theories of heterogeneous workers, heterogeneous learning, and heterogeneous firms. We set up a model that explicitly encompasses two of these theories, and that can illustrate the third. This unifying framework allows us to rigorously compare the predictions of the different theories. Thus, it is a useful tool for interpreting new and existing empirical evidence. We illustrate the usefulness of the model on matched employer−employee data, and we find considerable support for all three theories. In particular, the theory of heterogeneous workers can explain up to 75 percent of the premium.
OriginalsprogEngelsk
TidsskriftScandinavian Journal of Economics
Vol/bind115
Udgave nummer2
Sider (fra-til)292-325
ISSN0347-0520
DOI
StatusUdgivet - apr. 2013

Bibliografisk note

JEL Classification: F2;F16;F23

Emneord

  • Det Samfundsvidenskabelige Fakultet
  • Heterogeneous firms
  • heterogeneous workers
  • learning
  • wage premium

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