IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa10p1279.html
   My bibliography  Save this paper

Shareholders and wage determination - bringing in "space"

Author

Listed:
  • Marko Ogorevc
  • Sonja Slander

Abstract

Multinational firms transfer to their foreign affiliates superior technology, leading to higher productivity of their workers and therefore to higher wages, or so the often cited rent-sharing theory of multinational firms explains. But studies have shown that oftentimes, this results not from foreign ownership per se, but from other characteristics, which are positively related to wages and are more prevalent in foreign than in domestically owned firms (for example size, capital intensity, focus on high wage industries, ...). Furthermore, recent research argues that large shareholders (foreign or domestic) differ from each other, and that changes in a firm's policy are greater in the presence of specific groups of active blockholders (Bertrand and Mullainathan (2003), Cronqvist and Fahlenbrach (2007)). The aim of our paper is to disentangle the relationship between ownership and wages for the population of Slovenian joint stock companies, while accounting for "spatial" dependencies in wage determination. We have managed to augment the concept of space which in this paper is not considered in a geographical context, but as a set of ownership relations between firms. We apply methods of spatial econometrics - the spatial error model, while introducing the creation of "shareholder" spatial connectivity matrix.

Suggested Citation

  • Marko Ogorevc & Sonja Slander, 2011. "Shareholders and wage determination - bringing in "space"," ERSA conference papers ersa10p1279, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa10p1279
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper1279.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Almeida, Rita K., 2003. "The Effects of Foreign Owned Firms on the Labor Market," IZA Discussion Papers 785, Institute of Labor Economics (IZA).
    2. Fosfuri, Andrea & Motta, Massimo & Ronde, Thomas, 2001. "Foreign direct investment and spillovers through workers' mobility," Journal of International Economics, Elsevier, vol. 53(1), pages 205-222, February.
    3. Heyman, Fredrik & Sjoholm, Fredrik & Tingvall, Patrik Gustavsson, 2007. "Is there really a foreign ownership wage premium? Evidence from matched employer-employee data," Journal of International Economics, Elsevier, vol. 73(2), pages 355-376, November.
    4. Marianne Bertrand & Sendhil Mullainathan, 2003. "Enjoying the Quiet Life? Corporate Governance and Managerial Preferences," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1043-1075, October.
    5. Sjoholm, Fredrik & Lipsey, Robert E, 2006. "Foreign Firms and Indonesian Manufacturing Wages: An Analysis with Panel Data," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 201-221, October.
    6. Ramstetter, Eric D., 2004. "Labor productivity, wages, nationality, and foreign ownership shares in Thai manufacturing, 1996-2000," Journal of Asian Economics, Elsevier, vol. 14(6), pages 861-884, January.
    7. Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
    8. Bernard Fingleton & Enrique López‐Bazo, 2006. "Empirical growth models with spatial effects," Papers in Regional Science, Wiley Blackwell, vol. 85(2), pages 177-198, June.
    9. Manfred M. Fischer & Arthur Getis (ed.), 2010. "Handbook of Applied Spatial Analysis," Springer Books, Springer, number 978-3-642-03647-7, April.
    10. Brian Aitken & Ann Harrison & Robert E. Lipsey, 2022. "Wages and foreign ownership A comparative study of Mexico, Venezuela, and the United States," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 4, pages 61-87, World Scientific Publishing Co. Pte. Ltd..
    11. Steven Globerman & John C. Ries & Ilan Vertinsky, 1994. "The Economic Performance of Foreign Affiliates in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 143-156, February.
    12. Henrik Cronqvist & Rüdiger Fahlenbrach, 2009. "Large Shareholders and Corporate Policies," The Review of Financial Studies, Society for Financial Studies, vol. 22(10), pages 3941-3976, October.
    13. Martins, Pedro S., 2004. "Do Foreign Firms Really Pay Higher Wages? Evidence from Different Estimators," IZA Discussion Papers 1388, Institute of Labor Economics (IZA).
    14. 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.
    15. Lipsey, Robert E. & Sjoholm, Fredrik, 2004. "Foreign direct investment, education and wages in Indonesian manufacturing," Journal of Development Economics, Elsevier, vol. 73(1), pages 415-422, February.
    16. Sándor Csengödi & Rolf Jungnickel & Dieter M. Urban, 2008. "Foreign Takeovers and Wages in Hungary," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(1), pages 55-82, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fredrik Heyman & Fredrik Sjöholm & Patrik Gustavsson Tingvall, 2011. "Multinationals, cross-border acquisitions and wage dispersion," Canadian Journal of Economics, Canadian Economics Association, vol. 44(2), pages 627-650, May.
    2. Hartmut Egger & Udo Kreickemeier, 2017. "Why Foreign Ownership May be Good for You," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 13, pages 381-421, World Scientific Publishing Co. Pte. Ltd..
    3. Nikolaj Malchow-Møller & James R. Markusen & Bertel Schjerning, 2013. "Foreign Firms, Domestic Wages," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(2), pages 292-325, April.
    4. Martyn Andrews, & Lutz Bellmann, & Thorsten Schank, & Richard Upward, 2007. "The takeover and selection effects of foreign ownership in Germany: an analysis using linked worker-firm data," Discussion Papers 07/08, University of Nottingham, GEP.
    5. Cagatay Bircan, 2013. "Foreign direct investment and wages: does the level of ownership matter?," Working Papers 157, European Bank for Reconstruction and Development, Office of the Chief Economist.
    6. Csengődi, Sándor & Jungnickel, Rolf & Urban, Dieter M., 2005. "Foreign Takeovers and Wages: Theory and Evidence from Hungary," HWWA Discussion Papers 337, Hamburg Institute of International Economics (HWWA).
    7. Uros Delevic & James Kennell, 2022. "Multinationals And Wages: Evidence From Employer–Employee Data In Serbia," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(232), pages 49-80, January –.
    8. Khadija Straaten & Niccolò Pisani & Ans Kolk, 2020. "Unraveling the MNE wage premium," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(9), pages 1355-1390, December.
    9. Heyman, Fredrik & Sjoholm, Fredrik & Tingvall, Patrik Gustavsson, 2007. "Is there really a foreign ownership wage premium? Evidence from matched employer-employee data," Journal of International Economics, Elsevier, vol. 73(2), pages 355-376, November.
    10. Marzieh Abolhassani & Seçil Hülya Danakol, 2019. "Wage and competition channels of foreign direct investment and new firm entry," Small Business Economics, Springer, vol. 53(4), pages 935-960, December.
    11. Oldford, Erin & Otchere, Isaac, 2016. "Are cross-border acquisitions enemy of labor? An examination of employment and productivity effects," Pacific-Basin Finance Journal, Elsevier, vol. 40(PB), pages 438-455.
    12. Ding, Ding, 2015. "Leaning from multinational companies through hiring: An empirical investigation," Working Paper Series in Economics and Institutions of Innovation 402, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    13. Lejárraga,Iza & Ragoussis,Alexandros, 2018. "Beyond Capital : Monitoring Development Outcomes of Multinational Enterprises," Policy Research Working Paper Series 8686, The World Bank.
    14. Hakkala, Katariina & Heyman, Fredrik & Sjöholm, Fredrik, 2007. "Cross-Border Acquisitions, Multinationals and Wage Elasticities," Working Paper Series 709, Research Institute of Industrial Economics.
    15. repec:zbw:rwirep:0298 is not listed on IDEAS
    16. Santosh Kumar Sahu & Ankita Goel, 2023. "Wages and Firm Ownership: A Study of the Manufacturing Sector of India," Studies in Microeconomics, , vol. 11(2), pages 157-183, August.
    17. Pedro S. Martins & Luiz A. Esteves, 2008. "Foreign Ownership, Employment and Wages in Brazil: Evidence from Acquisitions, Divestments and Job Movers," Working Papers 15, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    18. John S. Earle & Álmos Telegdy, 2007. "Ownership and Wages: Estimating Public-Private and Foreign-Domestic Differentials using LEED from Hungary, 1986-2003," NBER Working Papers 12997, National Bureau of Economic Research, Inc.
    19. Dieter M. Urban, 2010. "FDI, Technology Spillovers, and Wages," Review of International Economics, Wiley Blackwell, vol. 18(3), pages 443-453, August.
    20. John S. Earle & Álmos Telegdy, 2008. "Ownership and Wages: Estimating Public-Private and Foreign-Domestic Differentials with LEED from Hungary, 1986 to 2003," NBER Chapters, in: The Analysis of Firms and Employees: Quantitative and Qualitative Approaches, pages 229-252, National Bureau of Economic Research, Inc.
    21. Blanas, Sotiris. & Seric, Adnan. & Viegelahn, Christian,, 2017. "Jobs, FDI and institutions in Sub-Saharan Africa evidence from firm-level data," ILO Working Papers 994987491902676, International Labour Organization.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa10p1279. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.