Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/2877 
Year of Publication: 
2002
Series/Report no.: 
IZA Discussion Papers No. 590
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Foreign-owned firms have consistently been found to pay higher wages than domestic firms to what appear to be equally productive workers in both developed and developing countries alike. Although a number of studies have documented and some attempted to explain this stylized fact, the issue still remains unresolved. In a multi-period bargaining framework we show that if firm specific training is more productive in foreign firms, foreign firm workers will have a steeper wage profile and thus acquire a premium over time. Using a rich employeremployee matched data set we show that the foreign wage premium is only acquired by workers over time spent in the firm and only by those that receive on the job training, thus providing empirical support for a firm specific human capital acquisition explanation.
Subjects: 
foreign firms
wages
on-the-job training
JEL: 
F23
J24
Document Type: 
Working Paper

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