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Foreign Direct Investment And Domestic Wages In The Usa

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  • SAIF S. ALHAKIMI
  • JAMES PEOPLES

Abstract

High wages generally prevail in industries with substantial foreign direct investment (FDI) in developed countries. This study examines whether such wages are economically justified by revealing the effect of worker and industry characteristics on the FDI–domestic wage relationship. Findings show that while observed worker characteristics that command high wages help explain high FDI wages, the propensity for foreign owners to invest in capital‐intensive industries contributes appreciably to the high wage paid to workers in industries with high levels of FDI.

Suggested Citation

  • Saif S. Alhakimi & James Peoples, 2009. "Foreign Direct Investment And Domestic Wages In The Usa," Manchester School, University of Manchester, vol. 77(1), pages 47-64, January.
    • Handle: RePEc:bla:manchs:v:77:y:2009:i:1:p:47-64
    DOI: 10.1111/j.1467-9957.2008.02086.x
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    References listed on IDEAS

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    7. Driffield, Nigel & Taylor, Karl, 2000. "FDI and the Labour Market: A Review of the Evidence and Policy Implications," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 16(3), pages 90-103, Autumn.
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    Cited by:

    1. Underwood, Robert L., 2012. "Automotive foreign direct investment in the United States: Economic and market consequences of globalization," Business Horizons, Elsevier, vol. 55(5), pages 463-474.
    2. Özlem Eren & James Peoples, 2013. "FDI activity and worker compensation: evidence from US non-manufacturing industries," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 37(3), pages 319-338, July.
    3. Masahiro Endoh, 2012. "Return Differentials of Foreign Investment among OECD Countries," Keio/Kyoto Joint Global COE Discussion Paper Series 2012-016, Keio/Kyoto Joint Global COE Program.
    4. Yifei Cai & Angeliki Menegaki, 2021. "FDI, growth and trade partisan conflict in the US: TVP-BVAR approach," Empirical Economics, Springer, vol. 60(3), pages 1335-1362, March.

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