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Title:Why do foreign-owned firms pay more? The role of on-the-job training PDF Logo
Authors:Görg, Holger
Strobl, Eric
Walsh, Frank A.
Issue Date:2007
Series/Report no.:CEPR Discussion Paper Series, Centre for Economic Policy Research (CEPR), London 6171
Abstract:While foreign-owned firms have consistently been found to pay higher wages than domestic firms to what appear to be equally productive workers, the causes of this remain unresolved. In a two-period bargaining framework we show that if training is more productive and specific in foreign firms, foreign firm workers will have a steeper wage profile and thus acquire a premium over time. Using a rich employer-employee matched data set we verify 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.
JEL:F23
J24
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW

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