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Human Capital Management White Papers

Do Foreign Firms Really Pay Higher Wages?: Evidence From Different Estimators

Overview This paper examines wage differentials between domestic and foreign firms, drawing on a large Portuguese matched employer-employee panel. Using OLS, the foreign-firm premium is large and significantly positive but falls substantially when firm and worker controls are added. Moreover, the premium also does not vary monotonically with foreign control, increases along the wage distribution and is generally insignificant when using propensity score matching (PSM). Finally, using differences-in-differences (DID), it is found that lower wage growth for workers in domestic firms that are acquired by foreign investors, a result that holds when combining DID and PSM.

Further White Paper Details
Publisher	University of London	File Format	PDF, requires Acrobat Rdr 5
Date Published	September 2004	Downloads	5
Format	White Papers
Topics	Human Capital Management

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