Wage differentials between foreign invested and domestic enterprises in the manufacturing: Evidence from Vietnam
Abstract
Purpose
The purpose of this paper is to examine the impact of trade and investment liberalization on the wage skill premium between skilled and unskilled workers in Vietnam.
Design/methodology/approach
An analysis is undertaken by means of descriptive statistics and econometric investigation using a firm-level data set from the Enterprise Survey of Vietnam.
Findings
It is shown that there has been a positive wage differential between foreign-invested enterprises (FIEs) and domestic enterprises over the period 2000-2009. More importantly, the FIE-domestic wage differentials are found to be significantly positive after accounting for differences in capital intensity, size, firm location, and industry features. Furthermore, statistical evidence shows that these wage differentials narrowed over the period 2006-2009.
Originality/value
One of the first study examines the FIE-domestic wage differentials given the outward-oriented economic reforms since 2000 in Vietnam.
Keywords
Acknowledgements
JEL Classification — F23, J31, L60, O53
The author is grateful to Prema-chandra Athukorala, Chris Manning, Eric D. Ramstetter, and Hal Hill for valuable comments and suggestions. However, the author is solely responsible for any remaining errors in the paper.
Citation
Nguyen, K.T. (2015), "Wage differentials between foreign invested and domestic enterprises in the manufacturing: Evidence from Vietnam", Journal of Economic Studies, Vol. 42 No. 6, pp. 1056-1077. https://doi.org/10.1108/JES-05-2014-0075
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited