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Export Activity, Firm Size and Wage Structure: Evidence from Taiwanese Manufacturing Firms

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  • Meng‐Wen Tsou
  • Jin‐Tan Liu
  • Cliff J. Huang

Abstract

This study adopts a semiparametric smooth coefficient model to evaluate the export–wage premiums, firm size–wage premiums, and the wage gap between skilled and unskilled labor. Particular focus is placed upon widespread evidence indicating that pay levels in ‘large’ and ‘export‐oriented’ firms are higher than in their ‘small’ and ‘domestic‐oriented’ counterparts. Applying the firm‐level data for Taiwanese manufacturing firms, we find a positive export–wage premium for skilled workers and a negative export–wage premium for unskilled workers. The hypothesis of a constant export premium across firm size is rejected. While most of the export–wage premiums for skilled labor can be attributed to the small and medium firms, the large exporting firms have a significant adverse effect on wages for unskilled labor. Moreover, our results suggest that the firm size–wage premiums for skilled workers are larger than those for unskilled workers. The wage gap between the two skill groups is also sensitive to size categories.

Suggested Citation

  • Meng‐Wen Tsou & Jin‐Tan Liu & Cliff J. Huang, 2006. "Export Activity, Firm Size and Wage Structure: Evidence from Taiwanese Manufacturing Firms," Asian Economic Journal, East Asian Economic Association, vol. 20(4), pages 333-354, December.
    • Handle: RePEc:bla:asiaec:v:20:y:2006:i:4:p:333-354
    DOI: 10.1111/j.1467-8381.2006.00242.x
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    Cited by:

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    2. Uwe Jirjahn & Kornelius Kraft, 2010. "Teamwork And Intra‐Firm Wage Dispersion Among Blue‐Collar Workers," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(4), pages 404-429, September.
    3. Dalgic, Basak & Fazlioglu, Burcu & Gasiorek, Michael, 2015. "Costs of trade and self-selection into exporting and importing: The case of Turkish manufacturing firms," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-28.
    4. Anderson, James E., 2011. "The specific factors continuum model, with implications for globalization and income risk," Journal of International Economics, Elsevier, vol. 85(2), pages 174-185.
    5. Fu, Dahai & Wu, Yanrui, 2013. "Export wage premium in China's manufacturing sector: A firm level analysis," China Economic Review, Elsevier, vol. 26(C), pages 182-196.
    6. Boyang You & Conglai Fan, 2020. "An Empirical Study of Net Job Creation, Firm Size and Firm Age in China," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 6(1), pages 220-231, January.
    7. Vu, Van Huong, 2012. "Does export participation affect wages and employment quality? the case of Vietnamese SMEs," MPRA Paper 38696, University Library of Munich, Germany.
    8. Fu, Dahai & Wu, Yanrui, 2011. "Exporting wage premium in the exporting sector: evidence from manufacturing firms in China," MPRA Paper 32721, University Library of Munich, Germany.
    9. Irene Brambilla & Nicolas Depetris Chauvin & Guido Porto, 2015. "Wage and Employment Gains from Exports: Evidence from Developing Countries," Working Papers 2015-28, CEPII research center.
    10. James E. Anderson, 2008. "Globalization and Income Distribution: A Specific Factors Continuum Approach," Boston College Working Papers in Economics 699, Boston College Department of Economics.
    11. Nielsen, Ingrid & Smyth, Russell, 2008. "Who bears the burden of employer compliance with social security contributions? Evidence from Chinese firm level data," China Economic Review, Elsevier, vol. 19(2), pages 230-244, June.
    12. Irene Brambilla & Nicolas Depetris Chauvin & Guido Porto, 2017. "Examining the Export Wage Premium in Developing Countries," Review of International Economics, Wiley Blackwell, vol. 25(3), pages 447-475, August.
    13. Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Wage Inequality in the manufacturing sector of recipient-countries," EconStor Preprints 213936, ZBW - Leibniz Information Centre for Economics.
    14. Marcel Fafchamps, 2009. "Human Capital, Exports, and Earnings," Economic Development and Cultural Change, University of Chicago Press, vol. 58(1), pages 111-141, October.
    15. Sandra M. Leitner & Robert Stehrer, 2011. "Do Exporters Share Part of their Rents with their Employees? Evidence from Austrian Manufacturing Firms," wiiw Working Papers 73, The Vienna Institute for International Economic Studies, wiiw.

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