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Do Chinese firms in Africa pay lower wages? A comparative analysis of manufacturing and construction firms in Angola and Ethiopia

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  • Oya, Carlos
  • Schaefer, Florian

Abstract

This paper analyses wage differences between Chinese and non-Chinese firms in Angola and Ethiopia. The growing engagement of Chinese firms in sub-Saharan Africa has generated debates about the working conditions offered to African workers. However, the evidence for many of the claims made about wages in Chinese firms operating in sub-Saharan Africa is unconvincing. In this paper the authors identify problems with the existing literature and provide new comparative evidence on wages in Chinese, other foreign and domestic firms in Angola and Ethiopia. Drawing on over 1,400 worker-level interviews the authors find that Chinese firms do not consistently pay less than comparable firms. Using a multi-scalar labour regime framework the authors show that a combination individual worker characteristics, sector specificities, and firm attributes are necessary to explain variations in wages in both countries. The national origin of firms by itself cannot explain the observed differences in wages.

Suggested Citation

  • Oya, Carlos & Schaefer, Florian, 2023. "Do Chinese firms in Africa pay lower wages? A comparative analysis of manufacturing and construction firms in Angola and Ethiopia," World Development, Elsevier, vol. 168(C).
    • Handle: RePEc:eee:wdevel:v:168:y:2023:i:c:s0305750x23000840
    DOI: 10.1016/j.worlddev.2023.106266
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    References listed on IDEAS

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    More about this item

    Keywords

    Wages; Labour regimes; Manufacturing; Construction; China; Angola; Ethiopia;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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