Trade, technology, foreign firms, and the wage gap

Wages and Firm Ownership: A Study of the Manufacturing Sector of India

Studies in Microeconomics ◽

10.1177/23210222211051453 ◽

2021 ◽

pp. 232102222110514

Author(s):

Santosh Kumar Sahu ◽

Ankita Goel

Keyword(s):

Fixed Effects ◽

Wage Gap ◽

Manufacturing Sector ◽

Manufacturing Firms ◽

Export Market ◽

Foreign Firms ◽

Firm Age ◽

Labour Intensity ◽

Size Firm ◽

Jel Classifications

From an ownership viewpoint, we analyse the determinants of significant wage differences for India’s manufacturing sector. We use data from the Centre for Monitoring Indian Economy’s Prowess database from 2000–2015. Using fixed-effects and Blinder–Oaxaca decomposition method, we confirm that foreign firms pay higher wages and salaries than domestic firms. Most importantly, productivity, participation in the export market, firm size, firm age and profit margin explain the inter-firm and intra-firm differences in labour intensity for the manufacturing firms in the Indian economy. The wage gap seems higher for intra-firm than the inter-firm, indicating that demand for labour is higher within the sector. JEL Classifications: E24, G32, L6, C13

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The gender wage gap and the presence of foreign firms in Vietnam: evidence from unconditional quantile regression decomposition

Journal of Economic Studies ◽

10.1108/jes-10-2020-0506 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Dao Dinh Nguyen ◽

Xinran Zhang ◽

Trang Huyen Nguyen

Keyword(s):

Quantile Regression ◽

Gender Discrimination ◽

Gender Wage Gap ◽

Wage Gap ◽

Wage Distribution ◽

Foreign Firms ◽

Content Type ◽

Foreign Companies ◽

Unconditional Quantile Regression ◽

Quantile Regression Decomposition

PurposeThe objective of this study is to estimate the gender wage gap in Vietnam and its rural and urban areas, especially with the presence of foreign firms.Design/methodology/approachThe authors use cross-sectional data from three rounds of the Vietnam Household Living Standards Survey (VHLSS 2008, 2012, and 2016) to investigate this issue. The unconditional quantile regression and Oaxaca–Blinder (OB) decomposition are used in this article.FindingsThe article finds the gender wage gap favouring men, especially in higher quantiles of the wage distribution. The gap in urban Vietnam was higher than in rural areas. The OB decomposition indicates that gender wage gap is mainly driven by gender discrimination. The differences in return to participation in foreign companies only contributed significantly and positively to such a gap in some models. It suggests that the gap in those models is affected by gender discrimination in employment opportunities in foreign companies. Regarding the endowment effect, some models provide the significantly negative impacts of foreign firms on gender wage inequality.Originality/valueThe study suggests that policies to reduce the gender wage gap should pay more attention to foreign firms, especially at higher wage classes.

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