What is it about?
This paper examines wage differentials among medium-large (20 or more employees) wholly-foreign multinational enterprises (WFs), joint-venture multinationals (JVs), state-owned enterprises (SOEs), and domestic private firms in Vietnamese manufacturing.
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Why is it important?
Wholly-foreign multinational enterprises (WFs), joint-venture multinationals (JVs), state-owned enterprises (SOEs) pay higher wages than domestic private firms in Vietnamese manufacturing. In large samples of medium-large (20+ employees) firms, conditional differentials accounting for worker education and occupation, as well as capital intensity, size, and shares of female workers, were substantially smaller, but positive and significant. Wage levels and differentials varied substantially among industries. Conditional differentials remained positive and significant for WFs and JVs in most of the 11 industries examined, but estimates of SOE-private differentials were insignificant in most industries. Robustness checks using 2007 data yielded similar results.
Perspectives
The results from this study provide important support for previous studies indicating that MNEs often pay significantly higher wages than local firms or plants in Southeast Asia, even after accounting important aspects of worker quality and other firm- or plant-level characteristics affecting wage determination. The results suggest there are important benefits accruing to workers in MNEs that, on average, exceed those required to employ the level of labour skills engaged
Dr Kien Trung Nguyen
Danang University of Economics
Read the Original
This page is a summary of: Wage Differentials among Ownership Groups and Worker Quality in Vietnamese Manufacturing, Global Economic Review, March 2017, Taylor & Francis,
DOI: 10.1080/1226508x.2017.1298459.
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